Abstract
Participatory pricing consists of unique pricing mechanisms which can provide firms an opportunity to differentiate themselves by allowing consumers to have some influence in setting the price in transactions. Many firms attempting to utilize participatory pricing mechanisms have struggled or even failed in their attempts. Understanding the role of branding with participatory pricing and how it is associated with consumer perceptions, attitudes, and behaviors would be beneficial as more firms attempt to utilize this pricing mechanism. Additionally, examining how giving consumers autonomy in part of the pricing mechanism could provide marketing managers insights into their purchasing preferences and behaviors. Two manuscripts in this dissertation examine aspects of participatory pricing and contribute to the emerging literature. Manuscript I furthers our understanding of branding in the context of elective pricing, also known as pay-what-you-want pricing. We investigate how self-brand congruity, self-construal, perceived quality, and price autonomy are associated with consumer purchase intentions (purchase likelihood and perceived satisfaction). We find significant main effects for self-brand congruity, perceived quality, and price autonomy on purchase intentions. Additionally, we find a significant interaction effect between price autonomy and product quality on consumer purchase intentions. As perceived product quality decreases, consumer purchase intentions significantly decrease for consumers exposed to fixed prices, but no change occurs for consumers exposed to elective prices. Manuscript II investigates how autonomy with surcharges is associated with consumer purchase intentions as well as examine how offer exclusivity and reactance. We find a main effect for surcharge autonomy on purchase intentions. Additionally, we find a significant interaction effect between surcharge autonomy and reactance where consumers with high levels of reactance have significantly lower purchase intentions when they are offered mandatory surcharges than when they are offered optional surcharges. Lastly, we find a significant interaction effect between surcharge autonomy and offer exclusivity where consumers receiving a mandatory surcharge that was inclusive, offered to everyone, had significantly higher purchase intentions than consumers receiving a mandatory surcharge that was exclusive, offered just to them.
Highlights
Participative Pricing Literature Review The participative pricing streams of research can be categorized as: (1) bidding and auctions, (2) name-your-own-price, (3) pay-what-you-want, (4) surcharges and upgrades, and (5) tipping
Across two experimental studies, we examine the roles of self-brand congruity, self-construal, product quality, and price autonomy with consumer purchase intentions in an elective pricing context
We contribute to the literature by showing how self-brand congruity, self-construal and product quality have associations with consumer purchase intentions in our model
Summary
Participative Pricing Literature Review The participative pricing streams of research can be categorized as: (1) bidding and auctions, (2) name-your-own-price, (3) pay-what-you-want, (4) surcharges and upgrades, and (5) tipping. Our studies provide insight into two forms of pricing: (1) elective pricing for the total cost of the component and (2) optional surcharges where consumers have control over one aspect of the price. Several individual difference, product, and branding variables are included to best understand how they interact with autonomy in the pricing mechanism This allows consumer behavior researchers to understand which consumers prefer having autonomy in the purchasing process and gives marketing managers insights as to which consumers to target when offering elective pricing and optional surcharges since it increases their purchase likelihood. Consumers are often willing to pay more when the price of a product is partitioned into a base cost and surcharge (Morwitz, Greenleaf, and Johnson 1998)
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