Dimensions of price satisfaction: a study in the retail banking industry

Dimensions of price satisfaction: a study in the retail banking industry Purpose – The purpose of this paper is to explore the dimensionality of price satisfaction. It argues that price satisfaction is composed of several dimensions (price transparency, price‐quality ratio, relative price, price confidence, price reliability, and price fairness) and that companies should consider these dimensions when monitoring customer satisfaction. Design/methodology/approach – Based on a theoretical discussion of the price dimensions, a questionnaire is developed that measures customer satisfaction with individual price dimensions. Using regression analysis the impact of price satisfaction dimensions on overall price satisfaction is measured, using a sample of 160 students. Findings – The results show that price satisfaction can be conceptualized as a multidimensional construct and that five dimensions influence overall price satisfaction. The application of the questionnaire allows for measuring price satisfaction in firms. Research limitations/implications – The paper introduces price satisfaction as a multidimensional construct and the study empirically supports the hypotheses. The student sample, however, restricts generalizability and more studies are needed to test the validity and reliability of the questionnaire. Practical implications – Based on the measurement of price satisfaction, managers are able to identify the drivers of price satisfaction, their satisfaction and relative importance in different market segments and, consequently they are able to take the right measures to increase customer satisfaction and loyalty. Originality/value – So far price satisfaction has been treated as a one‐dimensional construct. This paper contains a theoretical argumentation for why price satisfaction should be treated as a multi‐dimensional construct consisting of several dimensions, i.e. price‐quality ratio, price fairness, price transparency, price reliability and relative price. These dimensions constitute the determinants of overall price satisfaction. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Bank Marketing Emerald Publishing

Dimensions of price satisfaction: a study in the retail banking industry

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Publisher
Emerald Publishing
Copyright
Copyright © 2006 Emerald Group Publishing Limited. All rights reserved.
ISSN
0265-2323
DOI
10.1108/02652320610671324
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to explore the dimensionality of price satisfaction. It argues that price satisfaction is composed of several dimensions (price transparency, price‐quality ratio, relative price, price confidence, price reliability, and price fairness) and that companies should consider these dimensions when monitoring customer satisfaction. Design/methodology/approach – Based on a theoretical discussion of the price dimensions, a questionnaire is developed that measures customer satisfaction with individual price dimensions. Using regression analysis the impact of price satisfaction dimensions on overall price satisfaction is measured, using a sample of 160 students. Findings – The results show that price satisfaction can be conceptualized as a multidimensional construct and that five dimensions influence overall price satisfaction. The application of the questionnaire allows for measuring price satisfaction in firms. Research limitations/implications – The paper introduces price satisfaction as a multidimensional construct and the study empirically supports the hypotheses. The student sample, however, restricts generalizability and more studies are needed to test the validity and reliability of the questionnaire. Practical implications – Based on the measurement of price satisfaction, managers are able to identify the drivers of price satisfaction, their satisfaction and relative importance in different market segments and, consequently they are able to take the right measures to increase customer satisfaction and loyalty. Originality/value – So far price satisfaction has been treated as a one‐dimensional construct. This paper contains a theoretical argumentation for why price satisfaction should be treated as a multi‐dimensional construct consisting of several dimensions, i.e. price‐quality ratio, price fairness, price transparency, price reliability and relative price. These dimensions constitute the determinants of overall price satisfaction.

Journal

International Journal of Bank MarketingEmerald Publishing

Published: Jun 1, 2006

Keywords: Prices; Banking; Retailing; Customer satisfaction

References

  • Bank selection criteria employed by college students in Bahrain: an empirical analysis
    Almossawi, M.
  • The effects of free banking on overall satisfaction: the use of automated teller machines
    Goode, M.; Moutinho, L.
  • The relationship of customer satisfaction, customer loyalty and profitability: an empirical study
    Hallowell, R.
  • Credit card development strategies for the youth market: the use of conjoint analysis
    Kara, A.; Kaynak, E.; Kucukemiroglu, O.
  • Customer value, satisfaction, loyalty, and switching costs: an illustration from a business‐to‐business service context
    Lam, S.Y.; Shankar, V.; Erramilli, K.M.; Murthy, B.
  • Service quality: students' assessment of banks and building societies
    Lewis, B.R.; Orledge, J.; Mitchell, V.‐W.
  • Remembering versus knowing: issues in buyers' processing of price information
    Monroe, K.B.; Lee, A.Y.
  • Price fairness and its asymmetric effects on overall price, quality, and valued judgments: the case of an upscale hotel
    Oh, H.
  • Service quality, profitability, and the economic worth of customers: what we know and what we need to learn
    Zeithaml, V.A.

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