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This paper aims to outline a decision process for how consumers choose among two‐part tariffs which consist of a flat fee plus a per unit charge for usage over an allowance. The paper also seeks to examine what types of decision aids help consumers choose lower cost tariffs.

The approach used is two experimental studies.

Most consumers do not choose a tariff by calculating an expected cost because of usage uncertainty. They instead rely on simple comparisons of the overage rate, usage allowance, and flat fee attributes. These heuristics lead to systematic biases, beyond what actual true cost justifies, for favorable comparisons on these attributes. An online calculator improved choice of the lower cost option from 65 percent to 80 percent, yet this increased to 91 percent if people were also forced to consider a range of usage levels.

Consumers struggle to choose the lowest cost tariff, especially with uncertain usage. Consumers should realize the biases in their decision shortcuts and use the presented decision aids. Firms can leverage these biases by offering larger usage allowances (often done) and smaller overage rates (often not done), or correct them with decision aids.

Much work on tariffs assumes consumers calculate a cost, but the authors question this assumption, and show that consumers instead use simple attribute comparisons to deal with uncertain usage. An understanding of the specific heuristic consumers use allows the authors to better account for past effects, predict and establish new effects, and design effective decision aids. Results indicate tariff biases largely result from information processing shortcomings.

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.

A loyalty program might influence buyer behavior in several ways. Prior research offers evidence that buyers might increase the frequency of purchases and volume per occasion in a loyalty program; however, the effect on buyers' price tolerance has not been studied before. The aim of this paper is to examine buyers' willingness to pay a price premium for a firm offering a loyalty program reward.

An analytical model of dynamic consumer choice is developed, where one of the two selling firms offers a reward for a certain number of purchases. The maximum price premium that a normatively rational buyer should be willing to pay at each level of accumulated purchases is obtained. A price tolerance in controlled settings is obtained and these are compared with normative solutions.

Analytically, it is shown that the maximum price premium increases as purchases are accumulated; and the exact solutions can be found, given the price distributions and program design parameters. In the empirical studies it is found that individuals' maximum premiums are less than the normative levels. On the other hand, as buyers accumulate purchases from the reward offering firm, and get closer to the reward, maximum premiums paid increase – particularly when the reward is immediate.

This paper contributes to the loyalty programs literature by examining the price premium, or switching barrier, aspect of buyer response. Furthermore, the paper not only models and solves the normative strategy, but also obtains actual price tolerance in laboratory settings.

This study aims to discern emerging trends and provide a longitudinal perspective on merchandising research by identifying relationships between merchandising-related subdomains/themes.

This study sourced 657 merchandising-related articles published since 1960, from the Scopus database and 425 from Web of Science. After processing and normalizing the data, this study performed co-word and thematic network analyses. Taking a text mining approach, this study used topic modeling to identify a set of coherent topics characterized by the keywords of the articles.

This study identified the following merchandising-related themes: branding, retail, consumer, behavior, modeling, textile and clothing industry and visual merchandising. Although visual merchandising was the first type of merchandising to be used in-store, only recently has it become an emerging topic in the academic literature. There has been a further trend over the past decade to understand the adoption of simulation technology, such as computer-aided design, particularly in supply chain management in the clothing industry. These and other findings contribute to the discussion of the merchandising concept, approached from an evolutionary perspective.

The conclusions of this study hold implications at the intersection of merchandising, sectors, new technologies, research methodologies and merchandising-practitioner education. Research trends suggest that, in the future, virtual reality and augmented reality using neuroscientific methods will be applied to the e-merchandising context.

The different dimensions of merchandising can be used to leverage store managers’ decision-making process toward an integrated store-management strategy. In particular, by adopting loyalty merchandising tactics, the store can generate emotional attachment among consumers, who will perceive its value and services as unique, thanks to merchandising items designed specifically with that aim in mind. The stimulation of unplanned purchases, the strategic location of products and duration of each merchandising activity in the store, the digitalization of merchandising and the application of findings from neuroscience studies are some of the most relevant practical applications.

This study provides the first-ever longitudinal review of the state of the art in merchandising research, taking a holistic perspective of this field of knowledge spanning a 60-year period. The work makes a valuable contribution to the development of the marketing discipline.