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1 – 10 of over 136000Judy Harris and Edward A. Blair
The purpose of this paper is to examine how factors that affect the processing of bundled price information moderate consumer response to a price discount on the bundle…
Abstract
Purpose
The purpose of this paper is to examine how factors that affect the processing of bundled price information moderate consumer response to a price discount on the bundle. Literature on categorical vs piecemeal processing of information predicts that consumers will be inclined to process a bundled price categorically unless circumstances encourage a piecemeal processing approach. Marketing relevant variables that foster piecemeal processing should result in stronger effects for discount size on bundle choice.
Design/methodology/approach
This paper reports two experiments that demonstrate that the effect of discount size on bundle choice is moderated by increased salience of price information and lower familiarity with the purchase situation, both of which increase item price processing.
Findings
When the presentation format encouraged item price processing with more salient item prices or a less familiar purchase situation, a discount on the bundle significantly increased the likelihood of bundle choice. When circumstances did not encourage item price processing, discounts on the bundle relative to the item prices had little effect on choice.
Research limitations/implications
Additional research is recommended to test boundary conditions, the effects of additional presentational/situational factors and explicit consumer welfare implications.
Practical implications
Results indicate that a price discount on a bundle is only effective/necessary when the purchase situation motivates and enables consumers to engage in piecemeal processing of item price information. When large price discounts are offered on the bundle, marketers should create a situation that encourages item price processing, in order to maximize the effect.
Originality/value
This paper adds to a relatively new perspective in the bundling literature which has not fully examined if and when consumers process item price information. It is found that responsiveness to price discounts is enhanced by managerially relevant variables that increase the likelihood of item price processing.
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Davide Aloini, Riccardo Dulmin and Valeria Mininno
This paper attempts to provide an empirical cross‐industrial study on critical success factors impacting on “price” and “process” performance in business‐to‐business (B2B…
Abstract
Purpose
This paper attempts to provide an empirical cross‐industrial study on critical success factors impacting on “price” and “process” performance in business‐to‐business (B2B) e‐reverse auction design.
Design/methodology/approach
Based on an online survey to a panel of academic experts and practitioners, the paper presents the empirical validation of a previous conceptual model using a confirmatory factor analysis (CFA) approach.
Findings
Results demonstrate that a multi facet construct consisting of six main dimensions impacts on e‐auction performance. Moreover, these dimensions differently impact on price and process performance.
Research limitations/implications
Because of the complexity of the framework, the sample size and the qualitative nature of experts' observations, results should be seen as more indicative than conclusive and therefore generalization should be additionally tested.
Practical implications
Findings provide useful information for the formulation of managerial decisions in designing the auction event/process and supporting the definition of different negotiation strategies.
Originality/value
This article is a first attempt to test a conceptual framework on critical factors impacting on e‐reverse auction performance in a B2B context. A lot of conceptual papers try to systematize the numerous variables affecting e‐auction success and their complex relationships into a single comprehensive framework; nevertheless there is a lack of empirical evidence supporting these models especially in the B2B context.
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Usually price information is presented as arabic numerals and consumers’ brand selections often involve comparative judgments of product prices. One important issue concerns…
Abstract
Usually price information is presented as arabic numerals and consumers’ brand selections often involve comparative judgments of product prices. One important issue concerns whether consumers process price information in a similar way to that found in numerical cognition research. Since numerical processing is a learned, primarily automatic process, whether such processing interferes with or facilitates the processing of price information is an important question. It is important because a better understanding of how people process price information has implications for how managers should establish and communicate prices. This paper reports two studies that compare the processing of price with other numerical information.
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The purpose of this paper is to examine whether the online auction mechanism in the USA is more effective at pricing initial public offerings (IPOs) than the traditional book…
Abstract
Purpose
The purpose of this paper is to examine whether the online auction mechanism in the USA is more effective at pricing initial public offerings (IPOs) than the traditional book building process.
Design/methodology/approach
The analysis compares the performance of online auction IPOs with traditional IPOs issued in the same industry area and in the same year to assess the differences in first day mispricing and its persistence. The paper compares the characteristics of firms choosing the auction process relative to the traditional process. It also uses regression models to examine whether online auction IPOs had a significantly lower first day price increase than traditional IPOs.
Findings
The results indicate that for 60 percent of the auction IPOs, over 40 percent of the traditional IPOs issued in that year and in that three‐digit Standard Industry Classification (SIC) area had greater mispricing. The mispricing of online auction IPOs relative to traditional IPOs persist over time for 50‐80 percent of online auction IPOs. Regression analyses controlling for industry effects, year effects, size of the issue, and type of traditional underwriter (low, medium, and high volume underwriters) suggest that the auction's first day price surges are not significantly lower than those of traditional underwriters. Moreover, high volume traditional underwriters have statistically significantly higher first day price surges than low volume traditional underwriters, supporting the theory that they intentionally misprice to benefit their preferred clients. Firms choosing the auction process tend to be smaller in terms of the number of shares of their IPO and their annual sales than firms choosing the traditional IPO process. There is some overlap in industry sector and age, although this varies by year.
Originality/value
This paper suggests that the auction process may not be as efficient in pricing IPOs as was initially intended and that there are opportunities for further innovation and improvement.
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Sof Thrane, Martin Jarmatz, Michael Fetahi Laursen and Katrine Kornmaaler
The purpose of this paper is to analyze price decision-making through a practice-based approach. The paper investigates the micro-level practices used to arrive at sales price…
Abstract
Purpose
The purpose of this paper is to analyze price decision-making through a practice-based approach. The paper investigates the micro-level practices used to arrive at sales price decisions.
Design/methodology/approach
In this study, a qualitative study approach is used to develop findings abductively. The data are gathered through an in-depth case study at two firms: semi-structured interviews, meeting observations, shadowing and pricing documents.
Findings
This paper finds that pricing is a collective decision-making process involving multiple actors across the organization. The case firms work on solving information, coordination and control problems to arrive at sales prices by enacting interlinked practices. Pricing is therefore neither a structure nor a single decision but a process consisting of multiple micro-level practices that enable firms to make pricing decisions.
Originality/value
This paper develops a practice-based approach to pricing that conceptualize the micro-level practices used to to make pricing decisions in the face of information, coordination and control problems. The paper is interdisciplinary and adds to the accounting literature and the market literature, which have tended to study pricing as a decision made by one decision maker, and not as an organizational process where multiple actors share, evaluate, interpret and coordinate information and decisions.
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Marco Formentini and Pietro Romano
Research on business-to-business (B2B) pricing has been mainly focussed on the supplier’s pricing process, thus adopting traditionally an internal perspective and perceiving…
Abstract
Purpose
Research on business-to-business (B2B) pricing has been mainly focussed on the supplier’s pricing process, thus adopting traditionally an internal perspective and perceiving pricing as a profit distribution parameter rather than an opportunity for collaboration with customers. Recently, the opportunity to develop win-win, collaborative relationships in the B2B pricing process by embracing a supply chain perspective has started to attract the attention of scholars across several research streams, who have highlighted the emergence of this topic using different definitions, perspectives and methodologies. The purpose of this paper is to address the need for integrating the fragmented body of knowledge on B2B pricing toward supply chain collaboration.
Design/methodology/approach
This critical literature review adopts an interdisciplinary approach, focussing on industrial marketing and operations and supply chain management areas.
Findings
The authors provide a critical synthesis and discussion structured in four streams clustered around two dimensions, i.e. the “extension” of the collaboration in the pricing process along the supply chain and the “direction” of collaboration.
Research limitations/implications
Drawing on the literature gaps, the paper concludes by proposing an agenda for future research for a relevant topic both for academics and practitioners.
Originality/value
This paper offers a novel comprehensive view of the supply chain collaboration in the B2B pricing process and provides opportunities for intensifying dialogue across different research areas.
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Yuichiro Kawaguchi and Kazuhiro Tsubokawa
This paper proposes a discrete time real options model with time‐dependent and serial correlated return process for a real estate development problem with waiting options. Based…
Abstract
This paper proposes a discrete time real options model with time‐dependent and serial correlated return process for a real estate development problem with waiting options. Based on a Martingale condition, the paper claims to be able to relax many unrealistic assumptions made in the typical real option pricing methodology. Our real option model is a new one without assuming the return process as “Ito Process”, specifically, without assuming a geometric Brownian motion. We apply the model to the condominium market in Tokyo metropolitan area in the period 1971‐1997 and estimate the value of waiting to invest in 1998‐2007. The results partly provide realistic estimates of the parameters and show the applicability of our model.
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Rajib Hasan and Abdullah Shahid
We highlight two mechanisms of limited attention for expert information intermediaries, i.e., analysts, and the effects of such limited attention on the market price discovery…
Abstract
We highlight two mechanisms of limited attention for expert information intermediaries, i.e., analysts, and the effects of such limited attention on the market price discovery process. We approach analysts' limited attention from the perspective of day-to-day arrival of information and processing of tasks. We examine the attention-limiting role of competing tasks (number of earnings announcements and forecasts for portfolio firms) and distracting events (number of earnings announcements for non-portfolio firms) in analysts' forecast accuracy and the effects of such, on the subsequent price discovery process. Our results show that competing tasks worsen analysts' forecast accuracy, and competing task induced limited attention delays the market price adjustment process. On the other hand, distracting events can improve analysts' forecast accuracy and accelerate market price adjustments when such events relate to analysts' portfolio firms through industry memberships.
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This research aims to study whether consumers differ in their attitudes toward equivalent prices that include vs exclude taxes and fees. In addition, this research will study…
Abstract
Purpose
This research aims to study whether consumers differ in their attitudes toward equivalent prices that include vs exclude taxes and fees. In addition, this research will study whether computation ease-based processing fluency and perceived price fairness mediate this relationship in parallel, and whether need for cognition and political beliefs and affiliation moderate the effect.
Design/methodology/approach
Two experiments were conducted in which participants evaluated two price formats and then responded to relevant measures.
Findings
This research shows that consumers perceive prices that include (vs exclude) taxes and fees to be easier to process, and a fairer price, and subsequently exhibit a higher willingness to buy. Additionally, this effect is moderated by need for cognition, and political beliefs and affiliation.
Research limitations/implications
Future research could investigate potential additional situational moderators (such as price type – total vs unit, consumption category, relative sizes of base price vs taxes and fees) and dispositional moderators (such as price sensitivity and tightwadism/spendthriftism).
Practical implications
This research provides insights to marketers regarding the downstream impact of pricing decisions – such as including vs excluding taxes and fees from total price. Further, depending on the product category and target customer characteristics (political affiliation), marketers can determine whether to include or exclude taxes and fees.
Social implications
This research highlights the tendency of conservatives to avoid taxes and fees. As such, it adds to the understanding of conservative consumer groups.
Originality/value
This research contributes to existing research on price-framing research by finding an interesting effect related to multi-dimensional pricing and partitioned pricing. Additionally, this research contributes to existing research on computation ease-based processing fluency and price fairness perception. Finally, this contributes to an increasingly important body of research: the effect of political affiliation on consumption. This also provides clear guidance to marketers with regard to deciding service pricing.
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Stephan M. Liozu and Andreas Hinterhuber
This paper seeks to examine the influence of pricing orientation on the price‐setting process in industrial firms.
Abstract
Purpose
This paper seeks to examine the influence of pricing orientation on the price‐setting process in industrial firms.
Design/methodology/approach
The authors designed a qualitative inquiry based on the principles of grounded theory with 44 managers in 15 industrial firms located across ten US states. These managers included CEOs, pricing and marketing professionals, and financial professionals working in three industries (automotive, building products and chemicals).
Findings
The study's results reflect similarities and differences in the experiences of managers in industrial firms using all three pricing orientations. It reveals stark contrasts by pricing orientation with respect to how firms organize for pricing, manage the pricing process, make product pricing decisions, manage the transition to more advanced pricing orientations, and develop internal capabilities to face uncertain and ambiguous decisions. The findings also uncover contrasting price‐setting processes by pricing orientation and the balanced used of scientific versus intuitive decision‐making processes.
Practical implications
Pricing is often a neglected element of the industrial marketing mix. This study offers a variety of organizational practices by pricing orientation. The results highlight how best‐in‐class companies that adopted modern pricing practices to derive product prices are organized and how they reach pricing decisions.
Originality/value
This study studies the commonly accepted pricing orientations and links them to organizational structure and decision‐making theory. This study contributes to bridging pricing and organizational theories.
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