Main Content

Price highlighting helps consumers stick to longer-term product preferences, Rotman research reveals

January 27, 2014

Toronto – Just when that new gym membership is looking like a mistake, recent marketing research shows that reminding consumers of the price strengthens their purchase choices and leads to long-term satisfaction.

New research from the University of Toronto's Rotman School of Management says that even though most people value higher functionality over the long-term, they tend to prefer no-hassle convenience in the short-run. If it's a digital camera they need in a hurry, they may buy the easy-to-use version, only to later regret that it doesn't have the features they'd like.

When it comes to health clubs, consumers may forget or ignore the many long-term benefits that made them sign up in the first place, in favour of the easier choice of staying on the couch and avoiding the short-term inconvenience of working out.

In both cases, researchers say that highlighting and reminding consumers of the product's price helps them stick to their long-term preferences by prompting them to think about value. And those preferences tend to value greater functionality, or overall usefulness, instead of convenience.

"This has been a big problem for consumers' satisfaction and then their repeat business," says Min Zhao, an associate professor of marketing at Rotman.  She co-wrote the paper with Kelly Kiyeon Lee, a postdoctoral fellow of marketing at Washington University. "Once you've concluded you've made a bad choice, you're not happy with the product, and you may not want to go back to that company again."

Prof. Zhao suggests that gym managers could get new members out more, and increase their overall satisfaction, by sending them a weekly or monthly email reminding them how much they've paid.

The findings are based on a series of experiments in which participants were given a choice among similar products and were either told the product's price or not.  Participants given price information preferred the higher functionality products even in the short-term, while those who had no price information opted for more convenient products in the short-term, despite a longer-term preference for greater functionality.

The paper will be published in the Journal of Consumer Research.

Even being exposed to money and not actual prices made a difference. In one experiment, participants who were asked to count out $1 bills, but were not shown prices for software packages, also opted for the high functioning product in the short-term, similar to those who had been given price information.

For the latest thinking on business, management and economics from the Rotman School of Management, visit

The Rotman School of Management at the University of Toronto is redesigning business education for the 21st century with a curriculum based on Integrative Thinking. Located in the world’s most diverse city, the Rotman School fosters a new way to think that enables the design of creative business solutions.  For more information, visit


For more information:

Ken McGuffin
Manager, Media Relations
Rotman School of Management
University of Toronto
Voice 416.946.3818
Follow Rotman on Twitter @rotmanschool
Watch Rotman on You Tube