Psychological influences on customer willingness to pay and choice in automated retail settings

2014 ◽  
Vol 29 (3/4) ◽  
pp. 237-260 ◽  
Author(s):  
Ashutosh Dixit ◽  
Kenneth D. Hall ◽  
Sujay Dutta
Keyword(s):  
Willingness To Pay ◽  
Dynamic Pricing ◽  
Price Change ◽  
Price Fairness ◽  
Content Type ◽  
Theoretical Contribution ◽  
Perceived Price ◽  
Quasi Experimental ◽  
Small Increments ◽  
Perceived Price Fairness

Purpose – The purpose of this paper is to investigate the influence of price attribute framing and factors such as urgency and perceived price fairness on customer willingness to pay (WTP) in automated retail settings. Design/methodology/approach – The authors conducted two sets of quasi-experimental scenarios surrounding vending-machine purchase decisions. The first set was analyzed with MANOVA, the second set with choice-based conjoint (CBC) analysis. Findings – When prices are framed positively (as a discount), customer WTP is higher at high published price levels than it is for unframed or negatively framed prices. The effect on WTP holds whether the reference price range is broad (few large increments) or narrow (numerous small increments). In the CBC scenarios, immediate availability of the product was most influential on choice, followed by price and brand effects. These findings held under conditions invoking both urgency and price fairness. Providing an explanation for higher prices increases perceived price fairness. Research limitations/implications – Further study might assess the presence or absence of interaction effects in the conjoint scenarios. Practical implications – Managers should consider transparency in dynamic pricing, particularly when the price change is outside the control of the firm. The conjoint scenario results also offer evidence that dynamic pricing will not impact other marketing-mix decisions for fast-moving consumer goods (FMCG) dramatically (availability at point of purchase and presence in the consumer consideration set remain strong influences on choice). Social implications – Understanding these effects on WTP could help managers manage perceptions of unfairness and optimize WTP. Originality/value – A theoretical contribution from this study is that the immediate loss/gain consideration under theories of decision making under uncertainty outweigh considerations such as scarcity urgency or perceived unfairness. Use of conjoint analysis in WTP research, study of dynamic pricing in FMCG setting.

Exploring the synergy effect of trust with other beliefs in television shopping

2019 ◽  
Vol 58 (3) ◽  
pp. 428-447
Author(s):  
Yung-Shen Yen
Keyword(s):  
Purchase Intention ◽  
Service Providers ◽  
Purchase Behavior ◽  
Media Richness ◽  
Synergy Effect ◽  
Price Fairness ◽  
Content Type ◽  
Host Interaction ◽  
Perceived Price ◽  
Perceived Price Fairness

Purpose Television (TV) shopping has notably changed human shopping behaviors. However, despite its significant advantages, TV shopping still faces many challenges in promoting customer purchase behavior. The purpose of this paper is to explore the synergy effect of trust with other beliefs on purchase intention in TV shopping. Other beliefs, including perceived media richness, perceived price fairness, perceived convenience and perceived host interaction, were tested as the synergy factors in the proposed model. Design/methodology/approach A hierarchical moderator regression analysis was conducted, and data on the TV shopping habits of 428 customers in Taiwan were examined. Findings The findings of the study revealed that trust synergizes perceived price fairness and perceived host interaction rather than perceived media richness and perceived convenience to enhance purchase intention in TV shopping. Research limitations/implications This study confirmed the assumption that trust synergizes the beliefs (i.e. perceived price fairness and perceived host interaction) to enlarge purchase intention in TV shopping. Practical implications This study suggests that service providers need to prioritize concerns to build trust with customers to encourage purchases during TV shopping. They should also actively promote fair prices and invite famous people to serve as hosts to motivate purchases in TV shopping. Originality/value This study advances the knowledge of the trust theory and the synergy model by examining the synergy effect of trust with other beliefs in TV shopping.

When do high prices lead to purchase intention? Testing two layers of moderation effects

2019 ◽  
Vol 31 (5) ◽  
pp. 1516-1531 ◽  
Author(s):  
Junghwa Son ◽  
Byoungho Ellie Jin
Keyword(s):  
Purchase Intention ◽  
Price Fairness ◽  
Moderating Effects ◽  
Content Type ◽  
Leisure Class ◽  
Brand Familiarity ◽  
Perceived Price ◽  
Willingness To Purchase ◽  
Perceived Price Fairness ◽  
The Relationship

Purpose Most marketing practices assume that consumers will buy when prices are low. This assumption, however, may not always hold true. Employing equity theory and Veblen’s theory of the leisure class, this study tested two moderating effects to ascertain the relationship between perceived price and purchase intention. The purpose of this paper is threefold: first, to examine the relationship between perceived price and willingness to purchase; second, to discover the effects of two moderators (perceived price fairness and vanity) on this relationship; and third, to compare how these moderating effects differ by consumers’ brand familiarity. Design/methodology/approach A total of 287 usable data sets were collected from college students in the southeastern region of the USA. Findings The findings showed no negative relationship between perceived price and willingness to purchase. Only perceived price fairness was found to moderate the perceived price–purchase intention relationship. Furthermore, the moderating effect of price fairness was only confirmed in the high brand familiarity group, while the moderating effect of vanity was only confirmed in the low brand familiarity group. Research limitations/implications Generalization of the findings is cautioned because findings may vary by demographic backgrounds. Practical implications Since purchase intention increases when price is fair even though price is high, marketers should put efforts into promoting and creating the perception of fair price of their products and brands. Originality/value This study extends price perception research by incorporating two theories (equity theory and Veblen’s theory of the leisure class) that help further elaborate the relationship between perceived price and willingness to purchase.

Perceived price fairness of dynamic pricing

2011 ◽  
Vol 111 (4) ◽  
pp. 531-550 ◽  
Author(s):  
Simon Lee ◽  
Abdou Illia ◽  
Assion Lawson‐Body
Keyword(s):  
Dynamic Pricing ◽  
Price Fairness ◽  
Perceived Price ◽  
Perceived Price Fairness

How price fairness and fit affect customer tariff evaluations

2018 ◽  
Vol 29 (4) ◽  
pp. 735-764 ◽  
Author(s):  
Philipp Leinsle ◽  
Dirk Totzek ◽  
Jan Hendrik Schumann
Keyword(s):  
Experimental Studies ◽  
Price Fairness ◽  
Complex Interplay ◽  
Service Usage ◽  
Content Type ◽  
Perceived Price ◽  
Perceived Price Fairness ◽  
Consumption Goals ◽  
Tariff Choice

Purpose Promotional cues related to notions of fair prices or pricing designed to fit consumers’ needs are prevalent for many service offers. The purpose of this paper is to investigate how both customers’ price fairness and idiosyncratic fit perceptions shape their tariff evaluations. Design/methodology/approach Two experimental studies involving different tariff types and service contexts test the complex interplay of customers’ perceived price fairness and idiosyncratic fit with customer and context characteristics on their tariff evaluations. Findings Customers judge tariffs drawing on both the perceived price fairness and idiosyncratic fit, driven by the perceived price level of the tariff and the perceived pricing transparency of the firm. Customers’ service usage and consumption goals moderate these effects: heavy users and hedonic consumers indicate lower price sensitivity while focusing more on their transparency perception. The role of perceived price fairness and idiosyncratic fit for tariff choice depends on the tariff/service context; idiosyncratic fit is important when it is incidental (e.g. flat rates) rather than intentional (i.e. customized tariffs) and when customers lack the expertise or confidence to evaluate price fairness such as in the case of relatively new services. Originality/value Prior studies focused on either price fairness or idiosyncratic fit and thus cannot fully explain the complex interplay between both in the context of tariff choice. This paper explicates the conditions that affect the relative importance of both concepts and under which incidental offers are better received than premeditated ones.

scholarly journals Antecedents and consequences of fast-food restaurant customers' perception of price fairness

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Gurmeet Singh ◽  
Neale J. Slack ◽  
Shavneet Sharma ◽  
Asheefa Shaheen Aiyub ◽  
Alberto Ferraris
Keyword(s):  
Service Quality ◽  
Fast Food ◽  
Brand Image ◽  
Customer Retention ◽  
Price Fairness ◽  
Content Type ◽  
Perceived Price ◽  
Quality Dimensions ◽  
Service Quality Dimensions ◽  
Perceived Price Fairness

PurposeThis study examines the influence of service quality dimensions (food quality, physical environment quality and employee service quality) and brand image of fast-food restaurants on price fairness and its consequence on customer retention.Design/methodology/approachThis survey collected 331 responses using the public intercept method. Data analysis involved performing confirmatory factor analysis (CFA) on the measurement model, followed by structural equation modeling. Moderation analysis was performed using SPSS (model1 in process macro), while mediation was performed using model 4 in process macro.FindingsEmpirical results of this study revealed the positive effect of restaurant service quality dimensions on price fairness and price fairness on customer retention. It also revealed that brand image strengthened the restaurant service-quality/price fairness interrelationship, and that customer satisfaction partially mediated the price fairness/customer retention interrelationship.Research limitations/implicationsFindings of this study are useful to marketers and fast-food restaurateurs in establishing the right combination of service quality dimensions and brand image that increase perceptions of price fairness and increase customer satisfaction and retention.Originality/valueThis study contributes to advancing the theoretical foundations of customers' perceived price fairness and retention research, specifically in the understudied fast-food sector of emerging economies. It extends the application of the equity theory to expose the direct and indirect influences on customer perceived price fairness and customer retention. The findings provide a better understanding of price fairness perceptions.

scholarly journals Innovations for potential entrepreneurs in service quality and customer loyalty in the hospitality industry

2020 ◽  
Vol 14 (3) ◽  
pp. 317-328
Author(s):  
Zoya Wajid Satti ◽  
Samreen Fahim Babar ◽  
Shagufta Parveen ◽  
Kashif Abrar ◽  
Asma Shabbir
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Customer Loyalty ◽  
Hospitality Industry ◽  
Moderated Mediation ◽  
Price Fairness ◽  
Content Type ◽  
Perceived Price ◽  
Perceived Price Fairness

Purpose This study aims to investigate the role of moderated mediation between innovation in service quality and customer loyalty in the hospitality industry for potential entrepreneurs in the hospitality industry. Design/methodology/approach The authors have collected data from customers of the hospitality industry of significant cities of Pakistan using 362 structured questionnaires. Structural equation modelling was used to find out moderated mediation between innovation in service quality and customer loyalty in the hospitality industry for potential entrepreneurs in the hospitality industry. Findings The results showed that the role of customer satisfaction as a mediator and the role of perceived price fairness as a moderator between service quality and customer loyalty is statistically significant. Customers are influenced by price, and it leads to their satisfaction in the hospitality industry. Research limitations/implications The results of this study can be used by managers of the restaurant industry to enhance customer loyalty by focusing on customer satisfaction and perceived price. Originality/value The evidence documented in this paper is first known to measure the role of a mediator and moderator between service quality and customer loyalty for potential entrepreneurs. This paper will add to the literature of service quality in the hospitality industry concerning the role of customer satisfaction and perceived price fairness for future and potential entrepreneurs.

scholarly journals The Dual Pricing of Destinations: Tourist Perception on Sri Lanka

2020 ◽  
Vol 13 (8) ◽  
pp. 18
Author(s):  
Kingsley Bernard ◽  
Chamud Sathyapala ◽  
Thusara Wijesuriya ◽  
Sahan Sachintha ◽  
Rajith Dhanushka
Keyword(s):  
Sri Lanka ◽  
Willingness To Pay ◽  
Significant Relationship ◽  
Current Issue ◽  
Global South ◽  
Price Fairness ◽  
Pricing Policy ◽  
Tourist Destinations ◽  
Perceived Price ◽  
Perceived Price Fairness

Dual-Pricing of entrance fees to tourist destinations is a sensitive current issue among travelers, industry experts, and policy developers. This practice is mostly observed in the global south countries, to which Sri Lanka belongs. This study focuses on identifying and measuring the factors that influence the willingness-to-pay (WTP) entrance fees by foreign tourists visiting Sri Lanka and to understand their perception of the concept. The findings of this study revealed that income, knowledge, perceived price fairness, and visitor expectations possessed a significant relationship with WTP entrance fees in a dual-pricing context. Excepting knowledge other three variables had a significant impact on WTP. Furthermore, it was revealed that a majority of tourists accepted the dual-pricing policy, subject to certain concerns.

An integrated model of price, satisfaction and loyalty: an empirical analysis in the service sector

2007 ◽  
Vol 16 (7) ◽  
pp. 459-468 ◽  
Author(s):  
David Martín‐Consuegra ◽  
Arturo Molina ◽  
Águeda Esteban
Keyword(s):  
Customer Satisfaction ◽  
Service Sector ◽  
Empirical Support ◽  
Service Industries ◽  
Price Fairness ◽  
Content Type ◽  
Perceived Price ◽  
Perceived Price Fairness ◽  
The Relationship ◽  
Customer Satisfaction And Loyalty

PurposeThe purpose of this paper is to investigate the effects of customer satisfaction both directly and indirectly (through loyalty) on price acceptance. In addition, price fairness is considered as an antecedent of customer satisfaction and loyalty.Design/methodology/approachBased on a theoretical discussion regarding the relationship among price fairness, customer satisfaction, loyalty, and price acceptance, empirical research was conducted to test the proposed relationships. Multiple‐item indicators from previous studies were employed to measure the constructs.FindingsThe results from the study provide empirical support, suggesting that perceived price fairness influences customer satisfaction and loyalty. The analysis also suggests that customer satisfaction and loyalty are two important antecedents of price acceptance.Research limitations/implicationsThe study ponders the relationship between customer satisfaction and loyalty and price acceptance, while other factors that have an influence on price acceptance are not considered.Practical implicationsThe research results suggest that perceived price fairness in service industries can be viewed as a threshold factor in order to maintain satisfied and loyal customers. Additionally, managers should consider that price acceptance depends on the level of satisfaction and loyalty.Originality/valueThe present study provides useful information on the relationship among price fairness, customer satisfaction, loyalty, and price acceptance in service industries.

The effect of perceived price fairness through satisfaction and loyalty on international tourists’ price acceptance of Islamic-Iranian art products

2014 ◽  
Vol 7 (4) ◽  
pp. 201-215 ◽  
Author(s):  
Ali Asadi ◽  
Javad Khazaei Pool ◽  
Mohammad Reza Jalilvand
Keyword(s):  
Customer Satisfaction ◽  
Positive Impact ◽  
Equation Modeling ◽  
Price Fairness ◽  
Content Type ◽  
Perceived Vulnerability ◽  
Iranian Art ◽  
Perceived Price ◽  
Perceived Price Fairness ◽  
Customer Satisfaction And Loyalty

Purpose – The purpose of this paper is to investigate the effect of perceived price fairness through satisfaction and loyalty on price acceptance. The antecedents of price fairness, including price perception and tourist vulnerability, will also be examined. Design/methodology/approach – The authors collected 674 questionnaires from international tourists who purchased Islamic-Iranian art products and analyzed simultaneous relations with a structural equation modeling. Findings – The results indicate that perceived price awareness and perceived vulnerability positively and significantly affect perceived price fairness. Additionally, perceived price fairness has a significant influence on customer satisfaction and loyalty. Moreover, customer satisfaction and loyalty were found to have a positive impact on price acceptance. Practical implications – Based on the findings, the results are expected to create a useful perspective for the researchers so they can present a broader model in future studies. The results of this research can help managers develop better pricing strategies and effective pricing mechanism design and, through recognition of factors influencing customer perception of the price, instigate better pricing. Originality/value – Although prior research focused on the relationships among the variables of perception of price, perceived vulnerability, perceived price fairness, satisfaction and loyalty and price acceptance, the current study considers the effect of these variables as a general compound model and in the context of Islamic-Iranian art tourism products.

The match and mismatch between providers and customers in accommodation sharing: a cognitive style perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aihui Chen ◽  
Ying Yu ◽  
Yaobin Lu
Keyword(s):  
Information Technology ◽  
Cognitive Style ◽  
Matching Theory ◽  
Price Fairness ◽  
Content Type ◽  
Healthy Development ◽  
Significant Difference ◽  
Perceived Price ◽  
Perceived Price Fairness ◽  
Moderating Role

PurposeThe peer-to-peer (P2P) accommodation-sharing market has developed rapidly on the strength of information technology in recent years. Matching providers and customers in an information technology (IT)-enabled platform is a key determinant of both parties' experiences and the healthy development of the platform. However, previous research has not sufficiently explained the mechanism of provider–customer matching in accommodation sharing, especially at the psychological level. Based on field cognitive style theory, this study examines how the match and mismatch affect customers' online and offline satisfaction and whether a significant difference exists between online and offline satisfaction under different matching patterns.Design/methodology/approachThe authors test the proposed theoretical model using 122 provider–customer dyad data collected through a field study.FindingsThe results suggest that customers' online and offline satisfaction under match is significantly higher than that under mismatch. In addition, customers' online satisfaction is significantly higher than their offline satisfaction under mismatch, but there is no significant difference between the two under match. The perceived price fairness also plays a moderating role in the case of mismatch.Originality/valueIn summary, these findings provide a novel understanding about the matching patterns and their outcomes in the accommodation-sharing context and expand the contents and applications of field cognitive style theory and matching theory. This study will help these IT-enabled platforms to provide personalized matching services at the psychological level, thereby enhancing user experience and corporate competitiveness. 10; 10;

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