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Quantity consumer goods pricing: has yesterday’s surcharge become today’s discount?

Steve Dunphy (School of Business and Economics, Indiana University Northwest, Gary, Indiana, USA)

Journal of Product & Brand Management

ISSN: 1061-0421

Article publication date: 21 November 2016

703

Abstract

Purpose

This study aims to extend by way of replication an earlier study, “Blind man’s bluff: The ethics of quantity surcharges” (Gupta and Rominger, 1996) by testing several hypotheses regarding changes in the surcharging phenomenon that may have occurred over time.

Design/methodology/approach

The original study was constructed from data collected 20 years ago. This study went beyond a mere replication. A key difference between this study and the original study was in the method of data collection. In the earlier study, students were used to collect data. In this study, the author personally and carefully recorded the prices of the same 60 items that were noted in the original study. These new prices were then compared with the original ones. Several matched paired t-tests were administered to analyze the mean differences between the two sets of data.

Findings

The tests showed a highly significant difference in today’s pricing structure in comparison to the quantity surcharging phenomenon from the prior study. It was found that both the quantity of the items surcharged and the magnitude of the surcharges decreased in comparison to the surcharging reported in the original study.

Research limitations/implications

Reasons are given regarding what changed and why and suggestions are given for future research in the areas of private or in-store branding, the proliferation of “big box” stores and the changes in the frequency and magnitude of surcharging that may be occurring over time.

Originality/value

This study indicates that the quantity surcharging phenomenon has lessened. In fact, in mature markets which include big box discounters, the quantity surcharging phenomenon of 20 years ago may have given way to today’s quantity discount.

Keywords

Citation

Dunphy, S. (2016), "Quantity consumer goods pricing: has yesterday’s surcharge become today’s discount?", Journal of Product & Brand Management, Vol. 25 No. 7, pp. 721-728. https://doi.org/10.1108/JPBM-02-2016-1101

Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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