Unit pricing for multiple product sizes: identifying moderators and mediators of consumer evaluations

Abstract

Purpose This paper aims to investigate the underlying process by which a brand’s unit pricing for multiple package sizes influences consumer evaluations by incorporating several mediators and moderators. Two-unit pricing tactics were examined: quantity discounts and surcharges. Design/methodology/approach Two online experiments were conducted to test the hypotheses. Study 1 examined the mediating role of consumers’ inferred motive for sellers in setting quantity discounts or surcharges in the relationship between the pricing tactics and consumer evaluations. Study 2 incorporated affect as a mediator, and price consciousness and unit price usage as moderators in this relationship. Findings The mediating role of inferred motive is supported. Motive is related to the sales volume. Furthermore, this mediation effect is more potent when consumers have stronger quantity discount belief. Further, the mediating role of affect is supported. It is more salient when consumers are frequent users of unit prices. Research limitations/implications This study compared two pricing tactics and did not include a control condition. The first digit of the unit price for the small package size was different between the pricing tactics. Practical implications When applying quantity surcharges to products, it is essential to provide additional information to consumers to preclude the possibility of negative evaluations. Originality/value This study makes a significant contribution by offering a deeper understanding of consumer responses to the pricing tactics. In particular, it reveals that pricing tactics trigger both cognitive and affective responses, which then influence evaluations of the pricing tactics. This elicited cognition is associated with deduction about sellers’ brand-size pricing behavior.