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1 – 10 of over 1000Hsin-Hsien Liu and Hsuan-Yi Chou
Taking a mental accounting theory perspective, this study explores how pricing strategy (all-inclusive vs partitioned) influences consumers' perceived residual value of a product…
Abstract
Purpose
Taking a mental accounting theory perspective, this study explores how pricing strategy (all-inclusive vs partitioned) influences consumers' perceived residual value of a product and their subsequent intentions to upgrade to a newer model.
Design/methodology/approach
A pilot study and two formal experiments were conducted to test the hypotheses.
Findings
A partitioned (vs all-inclusive) price causes consumers to later recall a lower total cost and perceive lower residual value for the existing product, thereby increasing upgrade intentions. This finding holds for both utilitarian and hedonic products. Perceived residual value mediates the impact of the pricing strategy on upgrade intentions. The pricing strategy effect is stronger for state-oriented individuals than for action-oriented individuals.
Originality/value
This study extends understanding of the impact of pricing strategies from consumers' short-term immediate demand to long-term upgrade intentions. It also identifies a previously uninvestigated moderator (action-state orientation), clarifying the boundary conditions of pricing strategy effects. The study's conceptual framework links pricing strategy, sunk costs, perceived residual value and upgrade intentions, providing rich insights and potential research paths. These findings further enhance understanding of upgrade intentions.
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Jody L. Crosno and Annie Peng Cui
This research aims to represent an initial exploration of how partitioned pricing influences consumers’ purchase decisions of new versus used products from the theoretical…
Abstract
Purpose
This research aims to represent an initial exploration of how partitioned pricing influences consumers’ purchase decisions of new versus used products from the theoretical perspectives of prospect theory and gain/loss decision frames.
Design/methodology/approach
Four experiments to test the hypotheses with multiple product categories have been conducted.
Findings
Results from a series of experimental studies find that consumers prefer partitioned pricing over all-inclusive pricing for new products, whereas all-inclusive pricing is more preferred for used products. In addition, the authors demonstrate that a high-quality brand can reverse this effect for used products; specifically, consumers prefer partitioned pricing over all-inclusive pricing for a used product with a high-quality brand.
Originality/value
This research contributes to the literature on second-hand consumption by examining the impact of pricing strategies on consumer purchase decisions of new versus used products. This study deepens our understanding of consumer decision-making for new versus used products and it provides implications for bolstering sustainable consumption.
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This research seeks to examine differences in perceived shipping charge inflation associated with online promotions presented as reducing base product price, reducing shipping…
Abstract
Purpose
This research seeks to examine differences in perceived shipping charge inflation associated with online promotions presented as reducing base product price, reducing shipping surcharge, or reducing all‐inclusive price and its impact on deal values for shipping charge skeptics and non‐skeptics.
Design/methodology/approach
Drawing from research on multi‐component pricing and mental accounting, a laboratory experiment investigates if shipping charge skeptics differ in their perceptions of shipping charge inflation for different presentations of online promotions from non‐skeptics, and if they differ in perceived deal value of economically equivalent promotions presented as reduced product price, reduced shipping charge promotion, or reduced all‐inclusive price for high and low priced items with small or large shipping fees at retail websites.
Findings
Analyses show that shipping charge skeptics differ from non‐skeptics in their perceptions of shipping charge inflation and deal values for different online promotions only when the surcharge is large relative to the base price. Reduced price promotions are most attractive for high‐priced items with low surcharge but least attractive for large surcharge sizes. For large surcharge sizes, shipping charge skeptics prefer reduced all‐inclusive price promotions to reduced shipping promotions, while non‐skeptics prefer reduced shipping promotions to reduced all‐inclusive price promotions.
Research limitations/implications
The results suggest that the effectiveness of various promotion frames at online stores differ based on base price, surcharge size, and consumer skepticism of shipping charge. Robustness of the results obtained at different levels of discount sizes need investigation.
Practical implications
Online retailers that have to charge high shipping fees can use promotions to shift the referent price component used by consumers to calculate savings and mitigate perceptions of shipping or base price inflation. For equivalent dollar savings, retailers can use reduced shipping charge promotions to communicate higher deal values to shipping charge non‐skeptic consumers than reduced base price or reduced all‐inclusive promotions.
Originality/value
This research examines how consumer perceptions of deal values differ, even though objective savings and financial outlay is the same, when promotions are presented as reducing product price versus surcharge.
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Gillian Naylor and Kimberly E. Frank
Examines the importance of delivering an all‐inclusive price bundle to consumers. A longitudinal study is conducted to test the role of expectations of both price and other costs…
Abstract
Examines the importance of delivering an all‐inclusive price bundle to consumers. A longitudinal study is conducted to test the role of expectations of both price and other costs (e.g. hassle, time spent) associated with a price bundle on perceptions of value across first‐time and repeat guests at an upscale resort/spa. The findings confirm that consumers consider more than just benefits (quality) and price when assessing value. Specifically, finds that providing an all‐inclusive price package, even if actual monetary outlay is higher, will significantly increase perceptions of value for first‐time consumers.
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Three scenario-based experiments were conducted to explore the influence of the base option’s price format (just-at vs just-below) on tourists’ upgrade intention. The findings of…
Abstract
Three scenario-based experiments were conducted to explore the influence of the base option’s price format (just-at vs just-below) on tourists’ upgrade intention. The findings of this research indicated that tourists are more inclined to upgrade the option when the base option’s price is presented in a just-at condition due to the mediating role of tourists’ price perceptions of the upgrade option. This study discovered that the just-at (vs just-below) pricing strategy can lower tourists’ price perceptions of the upgrade choice. This research further explored the moderating of tourists’ mindsets. It was found the threshold-crossing effect will disappear for tourists with fixed mindsets. This study also provides practical implications for travel service providers to set up appropriate pricing strategies to attract tourists to make upgrade decisions.
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Arvind Sahay, Sumitava Mukherjee and Prem Prakash Dewani
The purpose of this paper is to study how consumers process price frames of product bundles (product plus surcharge) and discount offers to weigh contentious positions between the…
Abstract
Purpose
The purpose of this paper is to study how consumers process price frames of product bundles (product plus surcharge) and discount offers to weigh contentious positions between the weighted-additive and the reference-dependent models. Further, some research suggests bundling, while others suggest partitioning to be a more effective pricing strategy. This research evaluated the relative influences of different price frames to examine which model is supported and what are the boundary conditions for price framing.
Design/methodology/approach
Two online studies were conducted on Indian adults who had prior experiences of online purchases. They were asked to judge attractiveness of bundles (product along with shipping surcharge). Discounts were shown on the product, the surcharge or on the overall bundle either as partitioned prices or as a bundle.
Findings
Across two studies on low- and high-priced products, discounts on shipping surcharge increased attractiveness of the bundle compared to a similar discount on the product or on the overall bundle, supporting the reference-dependent model. Further, for a low-priced product, bundling increased attractiveness, while for a high-priced product, partitioning was more attractive.
Research limitations/implications
More research is needed to examine whether these results translate to other kinds of products, surcharges or discount promotions and in different populations.
Originality/value
This research makes important contributions to theoretical and practical aspects of bundling and partitioned pricing research. It also adds much needed data about evaluation of product bundles with shipping surcharges among Indian customers.
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Angela Mai Chi Chu and Cathy Hsu
This study aims to adopt a holistic approach to understand cruise revenue management (RM) practices that cover ticket and onboard revenues, through a cross-disciplinary literature…
Abstract
Purpose
This study aims to adopt a holistic approach to understand cruise revenue management (RM) practices that cover ticket and onboard revenues, through a cross-disciplinary literature review and practitioner interviews. An integrated cruise RM framework was developed and served as a blueprint for future cruise studies and practices.
Design/methodology/approach
A multi-stage approach was adopted, including a systematic literature review, two-waves of interviews with 26 cruise industry practitioners and the development of a holistic RM framework.
Findings
This study clarifies cruise RM functions across product planning, delivery stages and identifies ticket and onboard RM components. These are incorporated into the integrated framework, with weather and itinerary/ route attractiveness as additional considerations. Interviews revealed that there is no difference in the RM cycle before and during the COVID-19 pandemic, although strategies and tactics may vary in response to the market situation.
Research limitations/implications
Suggestions are made regarding product and service bundling and ways for ticket and onboard revenue teams to work together to optimize total revenue. Future research directions are also provided under the categories of RM applications and concepts, ticket core activities, onboard core activities and overall issues.
Originality/value
To the best of the authors’ knowledge, this is the first paper to conduct a cross-disciplinary systematic literature review of cruise RM without imposing publication dates or specific databases and the first to develop an integrated cruise “total” RM framework that includes ticket and onboard revenues.
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Although the evidence exists for the effect of promotional frame on repurchase intention, it is unclear whether the timing of repurchase can moderate the effect. In this paper…
Abstract
Purpose
Although the evidence exists for the effect of promotional frame on repurchase intention, it is unclear whether the timing of repurchase can moderate the effect. In this paper, three experiments were conducted to answer this question.
Design/methodology/approach
In Experiment 1, a 2 (framing: bundle vs. gift) × 2 (repurchase target: focal vs. supplementary) × 2 (timing: short vs. long) between-subjects design was used. In Experiment 2, an identical design was used except that repurchase target being the within-subjects factor. In Experiment 3, the design was based on that of Experiment 2 and brand was added a between-subjects factor.
Findings
Experiment 1 showed that, with a short interval, repurchase intention under gift frame was higher than that under bundle frame. With a long interval, there was no significant difference between the gift and bundle frames. Experiment 2, however, indicated no effects for expensive products. Experiment 3 showed that brand (private versus national brand) moderate the interaction between framing, repurchase target and timing. Particularly, for private brand, no significant comparisons were found; for national brand, repurchase intention for the focal product was significantly higher than for the supplementary product, but only under the conditions of long interval and gift frame (rather than bundle frame).
Originality/value
Taken together, findings from the current study contributes to the literature by showing for the first time that repurchase timing can moderate the promotional frame effect (i.e. higher repurchase intention under gift framing relative to bundle framing occurs in the short interval but not long interval) and that brand type can moderate the joint effects of framing, timing and repurchase target (i.e. national brand, rather than private brand, paired with long interval and gift frame results in higher repurchase intention for the focal product). The findings provide marketers with important knowledge in terms of how to adjust a promotional frame depending on when consumers repurchase a product and whether the product has a private or national brand.
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Abstract
Subject area
Tourism & Hospitality
Study level/applicability
Post graduate
Case overview
The South African-based Sun International Group (SI) develops, operates and manages hotels, resorts and casinos. In its mission statement, SI describes itself as a “leisure group offering superior gaming, hotel and entertainment experiences”. In 1984, SI was listed in the travel and leisure sector on the Johannesburg Stock Exchange. SI is looking for growth opportunities.
Expected learning outcomes
Strategic options analysis to create new market spaces. Practical application of blue ocean thinking frameworks.
Supplementary materials
Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.
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Toni Repetti, Susan Roe and Amy Gregory
The purpose of this study is twofold: to determine hotel customers’ preference among hotel amenities pricing strategies, specifically a bundled, all-inclusive charge in the form…
Abstract
Purpose
The purpose of this study is twofold: to determine hotel customers’ preference among hotel amenities pricing strategies, specifically a bundled, all-inclusive charge in the form of a resort fee, a limited choice resort fee at a lower price or a la carte pricing, and to determine whether hotel customer prefer bundled or partitioned pricing when faced with a mandatory resort fee.
Design/methodology/approach
An online survey of participants aged 18 years and older who had taken an overnight leisure trip in the past six months is conducted. A fixed-choice set conjoint analysis is performed to analyze the 353 usable surveys.
Findings
Results of this conjoint analysis show that 67 per cent of respondents prefer bundled pricing over partitioned pricing. Respondents also show higher utility for no resort fee and paying for amenities based on usage instead of being forced to pay a mandatory resort fee.
Practical implications
Guest preferences for pricing strategies can provide hotel operators with valuable information on how to establish pricing structures. Results suggest that hotel operators could benefit from presenting a bundled price inclusive of room rates and mandatory fees.
Originality/value
This is the only known study that examines mandatory fees in which customers receive additional amenities or services in exchange for an additional surcharge. This study also adds to the literature on pricing research in the hospitality industry.
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