Abstract

Partitioned pricing is a tactic in which a seller presents multiple prices for a single product or service instead of one, all-inclusive pricing. The purpose of this study firstly is to investigate effects of a partitioned price containing a variable number of price components on consumers’ total recall price, price fairness perception and purchase intention when the price is offered in the form of the partitioned price. Second purpose of the study is to investigate moderating effects of customers’ prior knowledge and involvement, which contain a variety of products’ attributes including price cues, on the customers’ price fairness perception in the partitioned price form. The results were that the total recall price was appeared lower between a large and a small number of the price components by a level of the partitioned. Second, the effect of the partitioned pricing along with a presentation of the all-inclusive total price together is only effective when the total price was not presented. Third, the involvement role as the moderator for the price fairness perception was effective, but the prior knowledge was not, contrary to our expectations. The moderating effect of the involvement was four times stronger than the prior knowledge to the price fairness perception. Practical implications for the consumers and marketers are that the partitioned pricing strategy was only effective when the all-inclusive total price was not presented with the partitioned price format. The multiple components of the partitioned pricing induced to be lowered to 8% of the recall prices depending on the level of the partitioned pricing. Theoretical contribution of this study is to reveal the moderating effect of the prior knowledge and the involvement on the price fairness perception in the partitioned pricing format.

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