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This paper aims to examine the effect of targeted promotions on perceptions of fairness from the perspective of consumers who are not targeted.
Abstract
Purpose
This paper aims to examine the effect of targeted promotions on perceptions of fairness from the perspective of consumers who are not targeted.
Design/methodology/approach
A scenario-based approach is used. Three studies manipulating promotion selectivity and various bases for promotion selection were conducted. A total of 403 people participated in the studies.
Findings
Results showed that these consumers consider targeted promotions unfair, and the primary reason is centered more on damage to relational identity than the economics of reduced perceived value. The effect is moderated by how the targeted promotion is delivered (buyer-discovered vs seller-delivered) and different basis for selection.
Practical implications
As companies adopting the practice of dynamic pricing such as targeted promotion, it is important to manage relationship with their consumers. Framing targeted promotions that reduce the salience of seller’s role and provide explanations that not attributed to buyer-seller relationship are important in reducing the potential damage of targeted promotion on relational identity.
Originality/value
Existing research on perceptions of price fairness has focused on the role of perceived value. This research tested the relative effect of perceived value, relational identity and personal identity in the context of targeted promotion and identified relational identity as the major mechanism.
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Discusses a conceptual model of consumers′ product evaluation thatshould help marketers′ understanding of price setting. Provides aconceptual model that incorporates acceptable…
Abstract
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.
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B. Rachel Yang, Reza H. Ahmadi and Kent B. Monroe
Multinational companies marketing their undifferentiated products to different countries unintentionally may create a problem for themselves. A low price in one country may…
Abstract
Multinational companies marketing their undifferentiated products to different countries unintentionally may create a problem for themselves. A low price in one country may encourage an enterprise to transship the products to another country with higher price, creating a new channel of parallel imports that competes with the authorized channels there. By setting prices reflecting differences in willingness to pay in the different countries, multinational firms are “setting” prices for their products in separable channels. In light of this problem of parallel import channels competing with the authorized channels, multinationals need to carefully establish their pricing strategies for the global marketplace.
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Lawrence S. Lockshin and W. Timothy Rhodus
This research compared wine quality evaluations by wine consumers and wine wholesalers for the same Chardonnay wine at three price levels and four different oak levels. Consumers…
Abstract
This research compared wine quality evaluations by wine consumers and wine wholesalers for the same Chardonnay wine at three price levels and four different oak levels. Consumers judged wines mainly by price, regardless of the oak level. Wholesale sales people ignored the prices and judged the wines by the oak level. Wholesalers predicted that consumers would respond based on the wholeaslers' quality judgments, and were unable to accurately predict the consumers' responses. Better targeting of consumers and better training of the wholesale representatives is recommended.
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Connie Rae Bateman, Neil C. Herndon and John P. Fraedrich
This paper represents a discussion of transfer pricing (TP). Key factors are identified and propositions developed from tax accounting and other perspectives. Stages of the TP…
Abstract
This paper represents a discussion of transfer pricing (TP). Key factors are identified and propositions developed from tax accounting and other perspectives. Stages of the TP decision process are identified along with the critical factors directly affecting sales and a TP audit. Propositions are derived which show relationships among these variables and tax rates, competition, and TP methodologies. Finally, academic research implications are suggested.
Andreas Herrmann, Lan Xia, Kent B. Monroe and Frank Huber
This paper aims to link conceptually the concepts of price fairness and customer satisfaction and empirically demonstrate the influence of perceived price fairness on satisfaction…
Abstract
Purpose
This paper aims to link conceptually the concepts of price fairness and customer satisfaction and empirically demonstrate the influence of perceived price fairness on satisfaction judgments. Further, it seeks to examine specific factors that influence fairness perceptions including price perception and consumer vulnerability.
Design/methodology/approach
The study is conducted in the context of automobile purchases in major German car dealerships. Based on a theoretical conceptualization of the constructs and an empirical pretest, 246 car buyers were surveyed and their fairness perceptions and satisfaction judgments with the car buying process measured.
Findings
The research shows that price perceptions directly influence satisfaction judgments as well as indirectly through perceptions of price fairness. Results also indicated that consumers' vulnerability, which is induced by a perceived demand‐supply relationship and the urgency of need from the consumers' side, had a negative effect on perceived price offer fairness.
Research limitations/implications
The research demonstrated the influence of perceived price fairness on satisfaction judgments empirically. The study was conducted in the context of car purchases and the generalizability of the model should be further tested.
Practical implications
The effect of consumer vulnerability implies that sellers should not only avoid exploiting their customers but should also anticipate consumers' potential feelings of being exploited. Being sensitive to the buyers’ psychological state and assuring buyers of fair treatment will enhance perceptions of price fairness without changing the price offer.
Originality/value
Both the direct and indirect effects of price perception on satisfaction judgment were examined in the paper. Specifically, the influences of consumer vulnerability and price procedure fairness on satisfaction judgments are new and contribute to the dual‐entitlement principle and our existing knowledge in price fairness.
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Previous research indicates that the goals consumers have when shopping influence their attention to and processing of information they encounter. The purpose of this paper is to…
Abstract
Purpose
Previous research indicates that the goals consumers have when shopping influence their attention to and processing of information they encounter. The purpose of this paper is to study the effects of consumers' pre‐purchase goals on their responses to price promotions.
Design/methodology/approach
In three experiments, the existence of consumer goals (i.e. with or without a pre‐purchase goal) were manipulated and promotion characteristics including message framing, promotion format, and promotion depth were systematically varied to examine how consumers respond to these price promotions.
Findings
Consumers with a pre‐purchase goal were found to be more attracted to the promotion than those without a goal. More importantly, pre‐purchase goals interact with promotion characteristics and produce differential effects on willingness to buy. Consumers with a pre‐purchase goal are more attracted to promotions emphasizing reduced losses while those without a goal responded more favorably toward promotions emphasizing gains. Moreover, consumers with and without a pre‐purchase goal respond differently to various discount levels.
Originality/value
Existing research on price promotions has not examined the influence of consumers' pre‐purchase goals. This paper brings a new dimension to price promotion research. Understanding these variations in pre‐purchase goals across consumers will help sellers design more effective promotion programs
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Claims that effective price communication for services requires understanding variables thatmediate the effects of price and the cognitive systems consumers use to process price…
Abstract
Claims that effective price communication for services requires understanding variables that mediate the effects of price and the cognitive systems consumers use to process price information. Presents a model which indicates that involvement and source credibility mediate the effects of price. Discusses the heuristic and analytic cognitive systems which consumers could use to process price information. The article also reports the results of an experiment which tested the model, and discusses the managerial implications of the model.
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Mui Kung, Kent B. Monroe and Jennifer L. Cox
Conventional theories suggest that the Internet will drive down prices and lead to perfectly competitive prices. However, there is contradictory evidence indicating that online…
Abstract
Conventional theories suggest that the Internet will drive down prices and lead to perfectly competitive prices. However, there is contradictory evidence indicating that online prices are not absolutely lower than offline stores. Regardless, the Internet gives rise to many opportunities for leveraging pricing strategies, in research and testing capabilities, customer segmentation, dynamic pricing, product differentiation, developing brand loyalty, including shipping and handling in the profitability analysis, offering multiple versions, and creating or participating in electronic marketplaces. The trading platform of eBay, Priceline’s reverse auction, and price comparison Web sites are examples of novel Internet pricing models that are helping create a new pricing paradigm.
Stephen B. Castleberry and Anna V.A. Resurreccion
Considers the extent of the marketers need to communicate qualityto the consumer and the best ways of doing so. Examines the results ofan experiment involving consumers. Suggests…
Abstract
Considers the extent of the marketers need to communicate quality to the consumer and the best ways of doing so. Examines the results of an experiment involving consumers. Suggests that some communication of quality is generally better than no such communication, although whether specific or non‐specific quality appeals should be used depends on the relative price of the brand.
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