Consumer price knowledge in Turkey – before and after the changeover of the national currency
| Pages | 450-457 |
| Date | 01 December 2006 |
| DOI | https://doi.org/10.1108/10610420610712838 |
| Published date | 01 December 2006 |
| Author | Helmut Schneider,Gülpınar Kelemci Schneider |
| Subject Matter | Marketing |
Pricing strategy & practice
Consumer price knowledge in Turkey – before
and after the changeover of the national
currency
Helmut Schneider
School of Management and Innovation, Steinbeis University, Berlin, Germany, and
Gu
¨lpınar Kelemci Schneider
School of Economics and Administrative Sciences, German Department of Business Administration, Marmara University,
Istanbul, Turkey
Abstract
Purpose – The first objective of the paper is to determine whether the national currency changeover in Turkey has altered the level of consumer price
knowledge. The second objective is to investigate the level of consumer price knowledge in an emerging economy, quite apart from the currency
changeover.
Design/methodology/approach – The paper looks at price knowledge by comparing consumers’ price estimations with actual market prices. Data
was collected, designed as a panel interview, at two points of time. The price data contains the actual prices of six selected products, from 27 retail
stores in Istanbul. The choice of retail outlets was conducted in such a manner,that they provide a highly representative image of prices in Istanbul. The
price estimation was obtained at personal interviews (599 individuals) outside a shopping situation in different parts of Istanbul.
Findings – The analysis suggests that the price knowledge of Turkish consumers has not deteriorated since the currency changeover.On the contrary, it
has slightly improved. According to the second objective, the price knowledge of consumers in an emerging economy turned out to be relatively poor,
although the level of price differentiation is rather low in the market.
Research limitations/implications – The first limitation is the context of price data, due to the specific economic infrastructure of an emerging
country such as Turkey. The second limitation relates to the investigated product categories and refers to all of the results on the relatively poor price
knowledge of Turkish consumers. Regarding further research, it would be useful to establish whether the price knowledge of Turkish consumers will
improve in the future on account of the inflation rate, which has been declining noticeably during the past few months. In addition, other methods of
measuring price knowledge can be used to determine whether the results for Turkish consumers are stable. Finally, including informal traders could
raise the explanatory power of data about the price knowledge of Turkish consumers.
Originality/value – Price knowledge in an emerging economy is poor. The effect of a currency changeover on price knowledge depends on the
conversion arithmetic.
Keywords Consumers, Consumer behaviour, Prices, Turkey
Paper type Research paper
Introduction
Similar to the introduction of the Euro in Europe, on the 1st
of January 2005, the new currency “Yeni Tu
¨rk Lirası” (YTL)
was introduced in Turkey, rendering the previous currency
“Tu
¨rk Lirası” invalid. In contrast to the Euro introduction,
however, this currency changeover was not the consequence
of a transformation from a national to a supranational
currency, but rather of the devaluation of the Turkish
currency as a result of an extended period of high inflation
(the average annual inflation rate between 1990 and 2001 was
74.2 per cent per year).
Because of this high inflation, before the currency
changeover, Turkey was the country with the highest
nominal currency value worldwide. The calculation unit for
everyday purchases was 1 million Tu
¨rk Lirası (approx.
US$0.75). Theref ore, the Turkish currency cha ngeover
meant that six digits of the old currency were discarded, so
that “1 million Tu
¨rk Lirası” became “1 Yeni Tu
¨rk Lirası”.
Furthermore, the increased significance of the new coins is
noteworthy. Accordingly, there were coins available in the old
currency, but, in view of their maximum nominal value of
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
15/7 (2006) 450–457
qEmerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610420610712838]
The authors would like to thank the German Academic Exchange Service
(DAAD) for their financial support of the study and acknowledge the
helpful comments of the two anonymous reviewers.
450
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