Search results

Suggests that housewives shift brand preferences when confronted with actual price differentials in a market and, irrespective of income or educational levels, react to price cues on low‐priced grocery items. Discusses and compares various studies conducted across varying price differences and consumer stereotypes in the UK and the USA. Reports results of an experiment designed to extend empirical evidence about the relationships among brand preference, perceived quality and price cues. Sums up that this study once again confirms the basic importance of price to housewives.

For many companies, raising prices can result in customer defections and reduced volumes. The right strategy for increasing prices can result in increased customer satisfaction and fewer defections. Several approaches for raising prices involve changing the customer value proposition at the same time as changing the price. This makes it harder for customers to identify the changes and they are less likely to react. Finally, a close examination of lifecycle patterns in customer usage allows companies to structure their prices so that customers “grow” into a price increase over time.

The paper attempts to answer “Will the shift from the locus of self to locus of others impact the magnitude of loss aversion?” and “Will different prices affect the self‐other asymmetry in choice?”.

The design is a two (locus: self vs others) by two (anchoring price: $30 vs $90) between‐subjects’ factorial with both the locus of evaluation and the monthly service plan charges (anchoring prices) as the between‐subjects’ factors.

The author finds that inertia equity is smaller when consumers evaluate peer customers than when they evaluate themselves to switch brands. It is also found that the locus effect is applicable to brands at various prices.

Further research should focus on the validations of the assumptions to support the empirical finding from the theoretical perspective.

Price reductions should be made personally relevant to the consumer and price increases should be made relevant to other things.

The locus effect expands the assessment of loss aversion from one (self or other) to two dimensions jointly (self and other). It demonstrates the impact of the locus of evaluation on the magnitude of loss aversion.

Discusses a conceptual model of consumers′ product evaluation that should help marketers′ understanding of price setting. Provides a conceptual model that incorporates acceptable value range and that examines the influence of price and store name information on quality, monetary sacrifice, value, and willingness to buy. Argues that unlike brand name image, which takes considerable time, money and managerial talent to develop, price and retail outlet are two distinct marketing tools for making quick position movements in a competitive market. Concludes that understanding the effects of price and store name information should lead to more effective and efficient behaviour in the marketplace by both buyers and sellers.

The purpose of this paper is to examine the uncertainty of acquiring the lowest possible airfare when contemplating the purchase of a ticket. A real option model is applied to value insurance contracts that could be offered to passengers to cope with price risk. Furthermore, the premiums charged for such airfare price insurance contracts can augment airline carrier revenues.

Prices on 14 airfares were collected for 79 consecutive days on an assortment of US domestic and international flights from four airline carriers. Volatility in airfares was shown using the price range and SD. The Black‐Scholes‐Merton model was employed to value the call and put options representing different airfare price insurance contracts.

Airfare price insurance contracts affordability was demonstrated ranging from 1.55 to 11.28 percent of the average dollar ticket price.

The valuations in the paper were based on ex post data that would not be available to the customer purchaser. Nonetheless, the airline carriers that sell the insurance would have better estimates of the price volatility and therefore could price the contracts to make a profit.

Airline passengers would have an opportunity to reduce the ticket price risk they face when buying their tickets. Airline carrier could increase revenues by offering such products.

The opportunity to manage price risk contributes to the completeness of markets.

The paper shows that airfare price insurance contracts are a viable tool in the management of price risk.

Many readers will be familiar with the Reports of the Prices and Incomes Board on topics from bread and bus fares to fletton bricks and university teachers' pay. But what are the grinding principles behind its delibera‐tions, and how does its activity restrict the freedom for marketing manoeuvre which modern management needs? Is the PIB an attempt to arrive at the medieval principles of the “just price”, or are these concepts of social costs and market orientated pricing a part of its philosophy? These are the issues raised in this exclusive interview, when Gordon Wills, Editor of “Management Decision” and Senior Lecturer in Marketing Studies at the Management Centre in the University of Bradford talked to AUBREY JONES, Chairman of the National Board for Prices and Incomes.

Presents here a theoretical model study based on the results of an empirical study, which relates brand shares to price differences in a fully quantitative fashion. Posits in its present form that it is applicable to the analysis of markets largely dominated by two brands. States that the model is simple to use and provides an eminently practical technique for market research and pricing decisions. Uses figures to emphasise the distribution function.

The aim of this paper is to describe a better decision framework for setting prices of goods and services, with particular focus on B2B goods sold through direct sales channels (although this may be applicable to many B2C markets also.) The focus is to link situations to pricing strategies, and so anchor pricing to factors that actually drive buyer decisions.

A large number of interviewees (850) in a number of industries (about 20), in a range of senior and buying‐related capacities, were asked how they evaluated potential purchases. In particular, what role pricing played, and how decision‐makers evaluated the prices offered by incumbent and new vendors. Interviews are supplemented through a number of case studies and references.

A key finding is that buying decisions are based on only three potential points of reference. The point of reference can be inferred by sellers with confidence from cues and understanding of the organizational history of the buying organization. With an understanding of which point of reference applies, sellers can correctly determine the required offer price. An additional finding is that in situations where the reference or competitive product comparison is unfavorable, there are ways in which sellers can point of reference by “changing the level of play” and so potentially change the outcome in their favor.

The findings are based on a limited number of interviews (850) and a limited number of industries (about 20). There may be instances where price level is a greater driver of customer behavior than suggested here.

The paper suggests that in many instances companies are mistaken in their approach to pricing. They neglect to consider buyer frames of reference, and so discount unnecessarily. The framework in this article also provides senior sales and marketing management with a process by which they can manage discounting.

This article helps “penetrate the black box” of buyer decision making, and links it to the objectives, experience and situations at the buyer's institution.

This paper is the first systematic view of buyer points of reference for pricing. Builds upon original interviews to show that the pricing reference point shifts to a limited number of comparison points, and even with limited information, sellers can make good judgments of what is the benchmark used by buyers – they do not need to guess.

Maintains that, in multi‐product companies, frequently it is the case that decisions taken on the price of one product will have implications for other products in the range. Controversy has frequently centred on the role that costs should play in determining price. Discusses attempts to overcome problems in pricing by use of a marginal cost approach rather than a full cost approach, therefore allowing the pricing decision to become one of attempting to maximize the contribution the product will make — the difference between price and the direct and attributable costs. Posits that product costs become irrelevant to pricing decisions even though they are highly pertinent to the decision's profitability. Examines price as one of the simplest ways of segmenting markets, stating that price segmentation can become far more effective when based on value‐in‐use.

Marketing textbooks tend to follow economic theory in their discussions of pricing, but in the real world pricing is an alchemical mixture of costs, competition and consumer psychology. This paper presents experimental evidence that, for at least some purchase situations, consumers' expectations of what a thing ought to cost may be a better predictor of choice between offerings than are the predictions from two well‐known theories relating price to consumer behavior. The paper discusses sources of consumer price expectations and ways they are influenced, and it suggests how to improve profits by basing prices on consumers' expectations.