The effects of price-matching guarantees on consumer response in an online retail context

Abstract

Purpose – The purpose of this paper is to investigate the effects of three price-matching guarantee (PMG) variables, including refund depth, refund period and competitive scope, on consumer response; the moderating role of consumer search costs is also examined. Design/methodology/approach – This study uses a scenario simulation method with a 2×2×2 factorial design to test the research model and hypotheses. Findings – The results indicate that refund depth has a significant effect on price perception and purchase intention, while competitive scope has a significant effect on purchase intention. In addition, the effects of both refund depth and competitive scope on price perception are moderated by consumer search costs. Originality/value – This study is a pioneering effort to explore the effects of PMGs variables on consumer response in the context of online retailing. These findings provide several important theoretical and practical implications for the PMG strategy of online retailing.