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

Learn More →

When time pressure counters the zero price effect

When time pressure counters the zero price effect The freemium pricing model is dominant in digital products such as mobile applications. While limited evaluation of a product such as when a consumer is under time pressure, has been found to increase consumer preference for the free version (“the zero price effect”), this paper aims to explore moderators that attenuate or reverse that effect.Design/methodology/approachThree experiments test the role of anchoring effects induced by time pressure in moderating the zero price effect.FindingsThe studies offer evidence that anchoring effects induced by time pressure can be directed to reduce preference for free versions of products. In addition, these effects are mediated by the perceived performance risk of a product and an upper boundary condition for monetary price level is found.Research limitations/implicationsThis research demonstrates exceptions to time pressure’s role in intensifying the zero price effect. Future research could focus on additional moderators of the effect such as the need for certainty and examine time pressure’s effect on in-app purchases.Practical implicationsThese findings can be directly applied by marketers of digital products using a freemium pricing model who wants to use time pressure to create urgency with customers without pushing them toward the free version of a product.Originality/valueThis paper finds exceptions to the zero price effect where consumers exhibit a stronger preference for the paid (vs free) version of a product when under time pressure. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Consumer Marketing Emerald Publishing

When time pressure counters the zero price effect

Loading next page...
 
/lp/emerald-publishing/when-time-pressure-counters-the-zero-price-effect-nxNzsuM5kB
Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0736-3761
DOI
10.1108/jcm-03-2020-3722
Publisher site
See Article on Publisher Site

Abstract

The freemium pricing model is dominant in digital products such as mobile applications. While limited evaluation of a product such as when a consumer is under time pressure, has been found to increase consumer preference for the free version (“the zero price effect”), this paper aims to explore moderators that attenuate or reverse that effect.Design/methodology/approachThree experiments test the role of anchoring effects induced by time pressure in moderating the zero price effect.FindingsThe studies offer evidence that anchoring effects induced by time pressure can be directed to reduce preference for free versions of products. In addition, these effects are mediated by the perceived performance risk of a product and an upper boundary condition for monetary price level is found.Research limitations/implicationsThis research demonstrates exceptions to time pressure’s role in intensifying the zero price effect. Future research could focus on additional moderators of the effect such as the need for certainty and examine time pressure’s effect on in-app purchases.Practical implicationsThese findings can be directly applied by marketers of digital products using a freemium pricing model who wants to use time pressure to create urgency with customers without pushing them toward the free version of a product.Originality/valueThis paper finds exceptions to the zero price effect where consumers exhibit a stronger preference for the paid (vs free) version of a product when under time pressure.

Journal

Journal of Consumer MarketingEmerald Publishing

Published: May 11, 2021

Keywords: Freemium; Mobile applications; Time pressure; Zero price effect; Anchoring; Anchoring effect

References