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Article
Publication date: 2 June 2010

Sarah Maxwell and Ellen Garbarino

The purpose of this paper is to identify some of the current social norms of pricing that constrain sellers' discriminatory pricing on the internet. Violations of such…

Abstract

Purpose

The purpose of this paper is to identify some of the current social norms of pricing that constrain sellers' discriminatory pricing on the internet. Violations of such social norms can lead to perceptions of price unfairness and swift and potentially damaging negative reactions from consumers. This paper seeks to demonstrate a state‐of‐the‐art technique for assessing social norms, to identify current norms using a large representative sample of US consumers and to distinguish between social norms and personal beliefs.

Design/methodology/approach

The study involves an online survey of 387 respondents. The survey was designed to measure both the consensus and the strength of consumer reaction to seller behaviors. To establish that a behavior is the norm, the consensus has to be greater than a 65 percent agreement and the strength of the response has to be significantly different from neutral. Both personal beliefs and perceptions of society's beliefs were collected.

Findings

The paper finds that some of the social norms constraining discriminatory pricing on the internet are as follows: a seller should charge the same price for a given item to all customers; a seller should not charge a higher price to either more loyal or more frequent customers; a seller should not charge more to new or infrequent customers; and a seller should not charge less to infrequent purchasers. In addition, although it is not established as a norm, a surprising 50 percent of the respondents think that Americans in general believe that all retailers should charge the same price for the same item. The paper also finds that personal beliefs are consistent with social norms but more extreme.

Practical implications

The implications are that e‐tailers need to be careful about price discrimination on the internet – many of the most profitable practices violate current internet pricing norms. For example, consumers do not think that it is fair to give a cheaper price to a new buyer than to a repeat buyer. However, different e‐tailers can offer the same product at a different price. That is not considered price discrimination.

Originality/value

By identifying the social norms of pricing, sellers are provided with the information they need to avoid unwitting violations of those norms. Sellers can thus avoid angering their customers, as Amazon did when they allegedly charged new customers less than established customers.

Details

Journal of Product & Brand Management, vol. 19 no. 3
Type: Research Article
ISSN: 1061-0421

Keywords

Content available
Article
Publication date: 6 November 2007

Hooman Estelami and Sarah Maxwell

Abstract

Details

Journal of Product & Brand Management, vol. 16 no. 7
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 30 October 2009

Sarah Maxwell, Sanghyun Lee, Sabine Anselstetter, Lucette B. Comer and Nicholas Maxwell

The research questions are whether there is a difference in how men and women respond to unfair prices and, if so, whether this gender difference extends across national…

Abstract

Purpose

The research questions are whether there is a difference in how men and women respond to unfair prices and, if so, whether this gender difference extends across national cultures. Is the difference due to nature or to nurture? This paper aims to answer these questions.

Design/methodology/approach

The study uses scenarios to conduct a survey‐based analysis of the effects of gender and country on responses to personally and socially unfair prices.

Findings

The results indicate that the response to price unfairness is due more to nurture than to nature. Although American females tend to be more sensitive than men to price unfairness, there is little or no difference between men and women in Germany and South Korea: both sexes there react negatively to an unfair price, particularly when the seller has acted unjustly.

Practical implications

In the USA, the gender difference in response to unfair prices suggests that different pricing tactics should be used for men than for women. However, since males in South Korea and Germany are just as sensitive as females to unfair prices, pricing tactics acceptable to American men may not work in other countries.

Originality/value

This paper takes a look at the manner in which a price increase for a frequently purchased but essential product is viewed as unfair. The paper examines the issue in three contrasting countries – Germany, South Korea and the USA – to determine if any observed differences are universal or culture‐specific.

Details

Journal of Consumer Marketing, vol. 26 no. 7
Type: Research Article
ISSN: 0736-3761

Keywords

Content available
Article
Publication date: 30 October 2009

Sarah Maxwell and Hooman Estelami

Abstract

Details

Journal of Product & Brand Management, vol. 18 no. 7
Type: Research Article
ISSN: 1061-0421

Content available
Article
Publication date: 2 November 2010

Sarah Maxwell and Hooman Estelami

Abstract

Details

Journal of Product & Brand Management, vol. 19 no. 7
Type: Research Article
ISSN: 1061-0421

Content available
Article
Publication date: 1 October 2006

Sarah Maxwell

Abstract

Details

Journal of Product & Brand Management, vol. 15 no. 6
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 1 February 1999

Sarah Maxwell

In developing pricing strategies for the global marketplace, sellers have to consider the differences in how their consumers process information on prices. One potential…

Abstract

In developing pricing strategies for the global marketplace, sellers have to consider the differences in how their consumers process information on prices. One potential difference is in attributions: whether the consumer blames the seller for a negative outcome such as a price increase. Prior research suggests that in individualistically oriented groups such as Anglos (and perhaps males), causal attributions are egocentrically biased: the cause of a negative outcome tends to be attributed to the actions of another person. In collectively oriented groups such as Hispanics (and perhaps females), the bias is much less. Empirical results, however, reveal that all groups demonstrate biased attributions of price increases. As a result, they have a less positive attitude toward the seller. The difference is that Hispanics and females generally infer that sellers have behaved in a more socially approved manner than do Anglos and males.

Details

Journal of Consumer Marketing, vol. 16 no. 1
Type: Research Article
ISSN: 0736-3761

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Article
Publication date: 31 October 2008

Sarah Maxwell

The purpose of this paper is to summarize the current research in disciplines outside marketing that applies to price fairness: research by behavioral economists, primate…

Abstract

Purpose

The purpose of this paper is to summarize the current research in disciplines outside marketing that applies to price fairness: research by behavioral economists, primate behavior researchers and social neuroscientists.

Design/methodology/approach

The approach is descriptive, summarizing the extensive research into fairness being done in disciplines other than marketing.

Findings

Research outside marketing indicates that a fair price is a preference. It has social utility that is independent of the economic utility of a low price. Consumers can actually harm themselves to punish what they perceive to be an unfair price. Conversely, a fair price triggers the reward center of the mind, stimulating happiness. The research also indicates that the response to a fair or unfair price is emotional: fast and automatic. The strength of that emotional response to unfairness varies across people. However, despite the variation in reactions, to ignore the concern for fairness is to miss a major motivation in economic decision making.

Originality/value

The fairness research in other disciplines both supports and informs the marketing research into what constitutes a fair price and how people respond to price (un)fairness.

Details

Journal of Product & Brand Management, vol. 17 no. 7
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 1 November 2011

Dhruv Grewal, Anne L. Roggeveen, Larry D. Compeau and Michael Levy

In this brief paper, the aim is to highlight three important pricing areas: the business strategies and pricing models that have evolved over the past 20 years of…

Abstract

Purpose

In this brief paper, the aim is to highlight three important pricing areas: the business strategies and pricing models that have evolved over the past 20 years of research, the customers that have been targeted, and the role of the internet on pricing. The advent of social media, mobile marketing and display technologies are likely to encourage researchers to pursue additional research on these topics.

Design/methodology/approach

The current paper is an essay aimed at stimulating pricing research in three major domains.

Findings

The authors review illustrative current practices and research findings pertaining to emerging pricing business models, customer target marketing and price dispersion on the web.

Research limitations/implications

The paper highlights areas that need empirical investigation.

Practical implications

Managers need to explicitly understand the role of these emerging technologies (e.g. social media, mobile media, and web‐application) and appropriately incorporate them into their pricing strategies.

Originality/value

The paper's central contribution is to stimulate additional research on key pricing areas.

Details

Journal of Product & Brand Management, vol. 20 no. 7
Type: Research Article
ISSN: 1061-0421

Keywords

Content available
Article
Publication date: 1 November 2011

Sarah M. Maxwell

Abstract

Details

Journal of Product & Brand Management, vol. 20 no. 7
Type: Research Article
ISSN: 1061-0421

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