A Dual-Theory Examination of Price Guarantee Advertising Believability and Its Impact on Consumer Trust, Satisfaction, and Repurchase in Retail

Abstract

This study investigates how the believability of price guarantee (PG) advertising influences key psychological and behavioural outcomes: trust, satisfaction, and repurchase intentions in retail consumers. Drawing on Signalling Theory and Expectation-Confirmation Theory (ECT), we conceptualise a Believability–Trust–Behavioural (BTB) model to explain how consumers cognitively evaluate and affectively respond to PG messages. A quasi-longitudinal field study was conducted, using a real-world sample of 1219 loyalty programme members from a major New Zealand retailer. Participants were exposed to two PG formats, Price-Beating Guarantees (PBG) and Automatic Price-Adjustment Promises (APP), and they responded to measures before and after purchase. Results from covariance-based structural equation modelling (SEM-AMOS28) confirm that advertising believability significantly enhances trust, which mediates satisfaction and repurchase intentions. APP was perceived as more credible, while PBG produced stronger behavioural outcomes when trust was established. The model explains 82 % of the variance in satisfaction and 26 % in repurchase intention. These findings advance marketing theory by demonstrating how advertising believability functions as a psychological signal that builds trust and drives loyalty. Methodologically, the study offers a novel empirical application of dual-theory integration in a real-world retail context. Practically, it provides actionable insights for designing psychologically credible PG advertising that enhances brand trust and long-term consumer engagement in increasingly competitive and value-conscious markets.