Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

PRICING STRATEGY & PRACTICE“Why did you do that?” The important role of inferred motive in perceptions of price fairness

PRICING STRATEGY & PRACTICE“Why did you do that?” The important role of inferred motive in... There is research evidence that suggests that perceptions of price unfairness give rise to consumer resistance to prices and result in decreased profit to the firm. However, it is as yet unclear what factors influence perceptions of unfairness. Answers the question, "What is fair?" by proposing that consumers sometimes infer a firm's motive for a price and that the inferred motive influences perceived price fairness. A study provides evidence that consumers use contextual information to infer a firm's motive. When consumers infer a negative motive, the price is perceived to be unfair and when consumers do not infer a negative motive, the same price is perceived to be fair. Suggests that marketers should: provide reasons for prices; consider consumers' likely inferences of motive and either avoid taking actions that are likely to give rise to inferences of negative motive or manage the motive inferred; and consider the inferences that consumers may make for other marketing actions in addition to price. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Product & Brand Management Emerald Publishing

PRICING STRATEGY & PRACTICE“Why did you do that?” The important role of inferred motive in perceptions of price fairness

Download PDF
8 pages

Loading next page...
 
/lp/emerald-publishing/pricing-strategy-practice-why-did-you-do-that-the-important-role-of-t0zXZIZqKU
Publisher
Emerald Publishing
Copyright
Copyright © 1999 MCB UP Ltd. All rights reserved.
ISSN
1061-0421
DOI
10.1108/10610429910266995
Publisher site
See Article on Publisher Site

Abstract

There is research evidence that suggests that perceptions of price unfairness give rise to consumer resistance to prices and result in decreased profit to the firm. However, it is as yet unclear what factors influence perceptions of unfairness. Answers the question, "What is fair?" by proposing that consumers sometimes infer a firm's motive for a price and that the inferred motive influences perceived price fairness. A study provides evidence that consumers use contextual information to infer a firm's motive. When consumers infer a negative motive, the price is perceived to be unfair and when consumers do not infer a negative motive, the same price is perceived to be fair. Suggests that marketers should: provide reasons for prices; consider consumers' likely inferences of motive and either avoid taking actions that are likely to give rise to inferences of negative motive or manage the motive inferred; and consider the inferences that consumers may make for other marketing actions in addition to price.

Journal

Journal of Product & Brand Management – Emerald Publishing

Published: Apr 1, 1999

Keywords: Advertising; Consumer behaviour; Perceptions; Pricing; Pricing strategy

References

  • The use and perceived fairness of price‐setting rules in the bulk electricity market
    Dickson, P; Kalapurakal, Rand
  • Fairness: effect on temporary and equilibrium prices in posted‐offer markets
    Franciosi, R; Kujal, P; Michelitsch, R; Smith, V; Deng, G
  • A model of reputation building and destruction
    Herbig, P; Milewicz, J.; Golden, J.
  • A laboratory market examination of the consumer price response to information about producers’ costs and profits
    Kachelmeier, S.; Limberg, S; Schadewald, M.
  • Fairness as a constraint on profit seeking: entitlements in the market
    Kahneman, D; Knetsch, J.; Thaler, R
  • Fairness and the assumptions of economics
    Kahneman, D; Knetsch, J; Thaler, R
  • Psychophysics of prices
    Kamen, J.; Toman, R.
  • Fairness in consumer pricing
    Kaufmann, P; Ortmeyer, G; Smith, N
  • Promoting product value through price fairness
    Martins, M
  • What makes a price increase seem fair?
    Maxwell, S
  • Buyers’ subjective perceptions of price
    Monroe, K
  • Buyers’ perceptions of price: an update of the evidence
    Monroe, K; Petroshius, S
  • Consumer information, product quality, and seller reputation
    Shapiro, C
  • All’s not fair in pricing: an initial look at the dual entitlement principle
    Urbany, J.; Madden, T; Dickson, P