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Price reduction strategy

Price reduction strategy PurposeThe purpose of this paper is to address consumers’ post-purchase perceptions toward the brand when it adopts price reduction strategy. The study specifically conceptualizes the effect of consumers’ price unfairness perceptions of past purchase (PUPoPP) on customer-based brand equity (CBBE) with a moderating effects of elapsed time since purchase (ETSP) and magnitude of price reduction (MPR) in situations where consumers were aware of the reduction in price of the product that they had purchased earlier.Design/methodology/approachA survey was conducted among consumers who were aware of the reduction in the price of the computer laptop which they had purchased earlier. A sample size of 214 respondents was utilized for the study. The hypotheses were tested by using partial least squares-structural equations modeling.FindingsThe results of the study show that there is a significant negative impact of PUPoPP on CBBE and the ETSP was found to enhance CBBE and also weaken the negative effect of PUPoPP on CBBE. Furthermore, the MPR was found to strengthen the negative effect of PUPoPP on CBBE.Originality/valueThe findings of this study are unique and contribute to both pricing and branding areas of research. While extant research in these areas has focused on price fairness perceptions in situations where the price of future purchase increases, particularly for frequently purchased non-durable goods, this study explored PUPoPP in situations where the firm reduces the price of a durable good such as a computer laptop. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asia Pacific Journal of Marketing and Logistics Emerald Publishing

Price reduction strategy

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References (84)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1355-5855
DOI
10.1108/APJML-04-2016-0067
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to address consumers’ post-purchase perceptions toward the brand when it adopts price reduction strategy. The study specifically conceptualizes the effect of consumers’ price unfairness perceptions of past purchase (PUPoPP) on customer-based brand equity (CBBE) with a moderating effects of elapsed time since purchase (ETSP) and magnitude of price reduction (MPR) in situations where consumers were aware of the reduction in price of the product that they had purchased earlier.Design/methodology/approachA survey was conducted among consumers who were aware of the reduction in the price of the computer laptop which they had purchased earlier. A sample size of 214 respondents was utilized for the study. The hypotheses were tested by using partial least squares-structural equations modeling.FindingsThe results of the study show that there is a significant negative impact of PUPoPP on CBBE and the ETSP was found to enhance CBBE and also weaken the negative effect of PUPoPP on CBBE. Furthermore, the MPR was found to strengthen the negative effect of PUPoPP on CBBE.Originality/valueThe findings of this study are unique and contribute to both pricing and branding areas of research. While extant research in these areas has focused on price fairness perceptions in situations where the price of future purchase increases, particularly for frequently purchased non-durable goods, this study explored PUPoPP in situations where the firm reduces the price of a durable good such as a computer laptop.

Journal

Asia Pacific Journal of Marketing and Logistics – Emerald Publishing

Published: Jun 12, 2017

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