Consumers' Perception of Manufacturers' Suggested List Price

Abstract

Although the Canadian Department of Consumer and Corporate Affairs has recently increased the monitoring of deceptive advertising, Canadian law continues to recognize most price comparisons as harmless. This paper presents evidence of the influence of price comparisons in showroom catalogs and newspaper advertisements. In a survey of 257 Canadian consumers, over 50% of the respondents associated the manufacturers' suggested list price with the price charged by a majority of stores in the local area. Cross-classification of responses on the basis of language, sex, education, and income yielded only one statistically significant difference for language.