Perceived Price Fairness Research Articles

Examining the Impact of Shipping Charge Fairness on Consumer Satisfaction and Behavior

AbstractFirms are increasingly recognizing that consumers' perceptions of price fairness should be considered when making logistics decisions at the firm level. A key element of price fairness is the shipping charges that consumers pay. This is especially critical with respect to online retail shipping charges as they represent a substantial portion of consumers' total cost and are visible to consumers before they place an order. Perceptions of the fairness of these prices are believed to impact online shoppers' selection of a retailer as well as influence subsequent purchase behavior. While large retailers may be able to leverage scale economies in shipping to offer free shipping on many orders, smaller firms may not be able to offer this to consumers. Thus, the general expectations of consumers are an important competitive factor in the environment, especially for the small and medium enterprises that are employers of 70 percent of US workers. This study assesses the impact of shipping charge fairness upon consumer satisfaction, repurchase, and positive word-of-mouth outcomes for a focal firm. Additionally, the moderating influences of shipping charge magnitude and consumer experience are examined. Consumer perceptions of fairness are found to influence satisfaction as well as willingness to repurchase and make positive referrals.

I guess that is fair: How the efforts of other customers influence buyer price fairness perceptions

AbstractPast research has demonstrated that consumers' price fairness judgments are influenced by comparisons between the offer price they receive and the prices paid by other consumers for the same product offering. In today's digital age, reference points for purchases are more prevalent than ever. However, investigations on how certain inputs of the transaction affect these judgments is lacking. Specifically, extant research has failed to account for how the purchase efforts of other consumers can influence one's own price fairness evaluations. Moreover, relatively little empirical research has endeavored to understand the simultaneous cognitive and affective processes that explain how consumers arrive at price fairness judgments. To address these gaps in the literature, we introduce two studies aimed at understanding the process through which the salient efforts of referent consumers serve to mitigate perceptions of price unfairness when two customers pay different prices for the same product. The findings support a dual‐process model whereby the efforts of other (referent) customers serve to simultaneously reduce buyer anger and increase buyer understanding of the price disparity, ultimately mitigating perceptions of price unfairness.

Voluntary pricing mechanisms for green product purchase: altruistic versus self-enhancing consideration

ABSTRACTVoluntary pricing mechanisms, such as Pay-What-You-Want (PWYW), could be a better pricing strategy to substitute for cash discount promotions. They can effectively promote the sales of conventional goods and services, while being influenced by socio-psychological variables. However, there is no clarity on the relative assessment of the impact of pricing frames, such as PWYW and Mark-Off-Your-Own-Price (MOYOP), on the consumers’ purchase of green products, where the purchase consideration might vary as the environment protection (altruistic) consideration versus the self-interest (self-enhancing) consideration. Further, there remains ambiguity on when and why such pricing mechanisms will work. This study, through an experiment, examines the buyers’ varied responses for the PWYW price frame versus the MOYOP price frame versus the fixed price frame under the environment protection (altruistic) consideration versus the self-interest (self-enhancing) consideration. It shows that although buyers do not show any difference in the mean voluntary payment between PWYW versus MOYOP frames as such; they prefer PWYW price frame under the environment protection (altruistic) consideration and MOYOP price frame under the self-interest (self-enhancing) consideration. The results show that the perception of price fairness mediates the relationship between pricing mechanism and willingness to buy (WTB). Furthermore, this study finds that price consciousness impacts the indirect effect of pricing mechanisms on WTB via perceived price fairness. The present study is the first to examine and analyze different considerations when the buyers’ preference varied for the PWYW versus MOYOP pricing frames. This study has suggested the underlying role of the perception of price fairness and price consciousness in the participative pricing mechanism on purchase.

The Effect of Service Quality and Perceived Price Fairness on Consumer Loyalty through Consumer Satisfaction on Budget Hotel in East Java

The purpose of this study was to determine and analyze the influence of service quality and perceived price fairness on consumer loyalty through customer satisfaction in budget hotels in East Java. This study of causality research uses a quantitative approach by testing hypotheses. In this study, the data will be tested using statistical formulas and using Structural Equation Modeling (SEM). The type of data in this study is quantitative data. The data source in this study is primary data. Data was obtained from questionnaires filled by budget hotel customers in East Java through surveys by distributing questionnaires to obtain data from respondents. The scale of data measurement used in this study is the interval scale that is one scale with the other scale has the same distance or size. The data measurement tool used is the Likert Scale. The research population refers to consumers who have stayed at budget hotels in East Java. Sampling is done using non probability sampling withdrawal techniques. The sample size in this study was 200 respondents with characteristics: a minimum age of 21 years and had stayed at a budget hotel in East Java at least more than once in the last 6 months. The results of the study prove that, first, service quality has a positive and significant effect on customer satisfaction (0.87, t-value 2.78). Second, perceived price fairness has a positive and significant effect on customer satisfaction (0.73 with a tvalue of 2.45). Third, customer satisfaction has a positive and significant effect on customer loyalty (0.98 and t value 3.69). Fourth, service quality has a positive and significant effect on customer loyalty through customer satisfaction (0.69 and the t-value is 4.04). Fifth, perceived price fairness has a positive and significant effect on customer loyalty through customer satisfaction (0.77 and the t-value is 2.11). Based on these results it can be concluded that if the budget hotel provides quality services and fair prices to its customers, consumers will be satisfied and eventually will be loyal to the budget hotel. Suggestions are proposed for the consumer loyalty theory learning to continue testing variables that affect consumer loyalty apart from the variables examined in this study, namely: service quality, perceived price fairness, consumer satisfaction, and consumer loyalty. Keywords: Consumer Loyalty, Consumer Satisfaction, Perceived Price Fairness, Service Quality

What is a fair fare? Exploring the differences between perceived price fairness and perceived price unfairness

Price is the cost consumers pay to stay with the manufacturer. In turn, the firms should make the consumers feel that their sacrifice is fair. Marketers should understand the differences between price fairness and unfairness. Most research manipulates causes price unfairness and assumes reverse is fairness. We study overall price (un)fairness as an aggregate of distributive, procedural, informational, and interpersonal justice and study what differences exist between price fairness and unfairness. Consumer’s sense of equity from the transaction and their understanding of the pricing policy contribute equally toward creating price fairness perceptions. Violation of equity has the greatest impact on price unfairness perceptions, followed by consumer's inability to understand procedures. For services, both distributive and procedural dimensions are equally important. Consumers display stronger preference to stay with the service provider in case of fair price perceptions than their preference to leave because of unfairness. Customers show a status quo bias. Positive communication influences them to repurchase.

A Conceptual Framework of Antecedents of Service Loyalty in Health Care: Patients’ Perspective

As the health care sector in India is becoming more and more competitive, researchers and practitioners are getting increasingly interested in exploring how post-purchase behaviour of patients can be managed and high level of patient loyalty can be ensured. Patient loyalty has gained immense importance in health care service sector in India because of the drastic changes that have taken place in health care market in the last two decades. Today, the health care market is characterized by intense competition and specialization. Hospital management is increasingly recognizing the need to focus on patient loyalty as a means to achieve profitability and also to improve their competitive position. In this article, we theoretically explore the relationship of the antecedents of patient loyalty (service quality, perceived value, corporate image and perceived price fairness) and its outcomes (patients’ satisfaction and patient loyalty). The outcome of this research is a conceptualization of antecedents of patients’ loyalty in the context of health care supported by research propositions based on the existing literature. The article contributes to the existing literature a hypothesized model that permits the examination of consumer behavioural procedures with regard to service quality, perceived value, perceived price fairness, corporate image, patient satisfaction and patient loyalty. Exploring these processes through empirical studies in future will provide new insights, which will help hospital management retain existing customers and attract new customers.

Customer repurchase intention in service business: a case study of car repair service business

The aim of this study is to determine the relationship between behavioural intention with customer repurchase intention, customer satisfaction, perceived service quality, perceived product quality and perceived price fairness in automobile industry, particularly in service garage. This study is specified at particular authorized automobile workshops in Indonesia. The non-probability purposive sampling was performed to obtain the samples of this research. Methodology: the survey was conducted online, using the main instrument of the data collection – the questionnaire which was adopted from previous researchers. The samples were obtained from a survey conducted for two weeks with 174 respondents. The four set of variables were then tested to ensure the validity and reliability along with the assumption test to ensure the normality, linearity, homoscedasticity and multi-collinearity, which was concluded as powerful enough to be used for this research. The statistical analyses results have supported all hypotheses stated in the research. As a result the study found positive and significant relationship of perceived service quality, perceived product quality, and perceived price fairness with customer satisfaction. In addition, in the second stage, customer satisfaction was also proven to have significant and positive relationship with repurchase intention. This study can be improved by adding the sample numbers, enlarge the samples with different car brands, and have further study on additional dependent variables. However, the current result has provided valuable inputs for automobile service garage to increase the customer repurchase intention. JEL Classification: M21, M31, M30.

Study on Overseas Luxury Consumption of Chinese Consumers —The Moderating Role of Fashion Difference Perception

The phenomenon of "inner cold and outer hot" in China's luxury market has attracted the attention of many scholars. Drawing on luxury consumption motivation theory, this article explores the relevant factors influencing Chinese consumers' overseas luxury purchase from multiple dimensions. The results show that three variables, the match degree between country of origins and sales, attached foreign emotional value and the store service, have a positive impact on consumers' attitude towards overseas luxury goods. Only price fairness perception has a negative influence on consumers' attitude towards overseas luxury goods. Furthermore, the effect of price fairness perception on consumers' attitudes towards luxury goods aboard is greater for customers who have a good sense on fashion difference perception. Keywords: luxury consumption motivation, attached foreign emotional value, fashion difference perception, price fairness perception, the match degree between country of origins and sales, store service DOI : 10.7176/EJBM/11-3-22

An Examination of the Relationship between Perceived price Fairness on Customer Satisfaction and Loyalty in Kenyan Star-Rated Restaurants

Perceived price fairness is an important predictor of relationship quality, trust, satisfaction and loyalty of customers visiting restaurants. Although several studies on customer satisfaction and loyalty have been done, little is still known about customer satisfaction and loyalty regarding perceived price fairness in Kenyan rated restaurants. The main objective of the study was therefore to examine the relationship between perceived price fairness on customers’ satisfaction and loyalty at rated restaurants in Nairobi and Coastal region. A cross sectional survey study was used in recording the information that is present in the population. Simple random sampling method was used in selecting 345 customers used in the study. The target population included all customers visiting the selected restaurants. Structured questionnaires were used in acquiring relevant information from customers. Descriptive statistics and inferential statistics (linear regression analysis) were used in analyzing the objective. The results indicated significant relationship between perceived price with satisfaction and return intention (p< 0.05), leading to the rejection of the hypotheses. Majority of the customers were found to be satisfied with all dimensions of perceived price which implied that satisfaction of perceived price fairness led to return intention of customers in the rated restaurants. The study suggested that the restaurant managers should improve on both perceived value and price. They should also ensure that the set prices are not more than the prices of their competitors of the same standard. Investment on staff training was also suggested.

Perceived price and service quality as mediators between price fairness and perceived value in business banking relationships

PurposeThe purpose of this paper is to test perceived price and service quality as mediators between price fairness and perceived value in service encounters between micro-enterprises and their banks.Design/methodology/approachThe study is based on a self-administered and internet-based questionnaire conducted in the banking industry. The sample consists of 381 micro-enterprises in South Africa that employ one or two staff members.FindingsThe findings of this paper provide evidence for both theory and practice that perceived price and service quality influence the relationship between business banking customers’ perception of price fairness and the value of the service offered.Research limitations/implicationsThe measurement and structural properties reported are satisfactory. This paper confirms the hypothesized relationships in the tested research model, and rejects a tested rival model. Limitations are reported, and suggestions for further research are provided.Practical implicationsThis paper offers banking executives guidance in managing the pricing structure of their services, and highlights the value of offering greater transparency with regards to service charges and interest rates.Originality/valueThis paper contributes to insights into the mediating effects of perceived price and service quality between price fairness and perceived value in business relationships between micro-enterprises and their banks.

How price fairness and fit affect customer tariff evaluations

Purpose Promotional cues related to notions of fair prices or pricing designed to fit consumers’ needs are prevalent for many service offers. The purpose of this paper is to investigate how both customers’ price fairness and idiosyncratic fit perceptions shape their tariff evaluations. Design/methodology/approach Two experimental studies involving different tariff types and service contexts test the complex interplay of customers’ perceived price fairness and idiosyncratic fit with customer and context characteristics on their tariff evaluations. Findings Customers judge tariffs drawing on both the perceived price fairness and idiosyncratic fit, driven by the perceived price level of the tariff and the perceived pricing transparency of the firm. Customers’ service usage and consumption goals moderate these effects: heavy users and hedonic consumers indicate lower price sensitivity while focusing more on their transparency perception. The role of perceived price fairness and idiosyncratic fit for tariff choice depends on the tariff/service context; idiosyncratic fit is important when it is incidental (e.g. flat rates) rather than intentional (i.e. customized tariffs) and when customers lack the expertise or confidence to evaluate price fairness such as in the case of relatively new services. Originality/value Prior studies focused on either price fairness or idiosyncratic fit and thus cannot fully explain the complex interplay between both in the context of tariff choice. This paper explicates the conditions that affect the relative importance of both concepts and under which incidental offers are better received than premeditated ones.

The role of satisfaction and loyalty for insurers

PurposeThe purpose of this paper is to examine the crucial antecedents of satisfaction and loyalty for the insurance industry and discuss how customer satisfaction and loyalty can be increased.Design/methodology/approachA large-scale global survey is conducted among 11,736 insurance customers. To analyze the data, structural equation modeling is used to estimate the influence of the identified antecedents of satisfaction and loyalty.FindingsThe results reveal a positive relationship between satisfaction and attitudinal loyalty for the insurance industry. In addition, the individual cognitive-based dimensions of anticipated regret and product category knowledge significantly affect satisfaction. Furthermore, co-production and trust both positively affect satisfaction and attitudinal loyalty.Research limitations/implicationsThis study identifies relevant antecedents of satisfaction and attitudinal loyalty for the emerging literature of insurance marketing. Future studies in this domain should examine the influence of additional dimensions which were not part of the present work, such as perceived price fairness, service quality, and switching costs.Practical implicationsBy installing and maintaining efficient two-way communication channels, insurers can decrease customers’ anticipated regret and enhance product category knowledge, which, in turn, can increase customer satisfaction. In addition, frequent and honest communication should be used to build up trust and induce co-production, which positively affect satisfaction and attitudinal loyalty.Originality/valueThis paper identifies crucial antecedents of satisfaction and attitudinal loyalty for insurance companies. This research is timely, as previous works have largely neglected the idiosyncrasies of the insurance sector.

Measuring service quality perceptions of customers in the hotel industry of Pakistan

This study looks at the relationship among perceived service quality, perceived price fairness, and customer loyalty. It further examines the role of customer satisfaction as a mediator in the relationship between perceived service quality and customer loyalty, and perceived price fairness and customer loyalty. We argue that customers’ needs are less uniform, and so their expectations, perceptions, satisfaction and loyalty vary across their characteristics. To this end, we draw on a sample of 252 consumers of the hotel industry sector in Pakistan. We employ gap analysis using paired-sample t-test and analysis of variance to test for the variations in the customers’ expectations, perceptions, satisfaction and loyalty. Following that, we test the relationships. Our results identify variances in the expectations, perceptions, satisfaction and loyalty across the customers’ demographics. Customer satisfaction partially mediates the relationship between perceived service quality and customer loyalty, and fully mediates the relationship between perceived price fairness and customer loyalty. Based on results, we drew implication for theory and practice.

A two-period pricing model for perishable items

This paper presents a two-period pricing model for perishable items via an advance selling strategy deployed within electronic businesses. This model is proposed by classifying consumers based on their shopping habits: strategic consumers and conventional consumers. The model was developed both with and without a consumer order cancellation variable. Numerical computation and sensitivity analysis were conducted to test and justify the theoretical model. The results demonstrate that the ratio of potential consumers in an advance selling period to that in regular selling period is the main factor affecting pricing decisions. Consumers' perception of price fairness and order cancellation have effect on sellers' total revenue. The best revenue and price is obtained by adjusting the length of the advance selling period.

A two-period pricing model for perishable items

This paper presents a two-period pricing model for perishable items via an advance selling strategy deployed within electronic businesses. This model is proposed by classifying consumers based on their shopping habits: strategic consumers and conventional consumers. The model was developed both with and without a consumer order cancellation variable. Numerical computation and sensitivity analysis were conducted to test and justify the theoretical model. The results demonstrate that the ratio of potential consumers in an advance selling period to that in regular selling period is the main factor affecting pricing decisions. Consumers' perception of price fairness and order cancellation have effect on sellers' total revenue. The best revenue and price is obtained by adjusting the length of the advance selling period.

Impact of Brand Image, Service Quality and Trust on Customer Loyalty, Moderating Effect of Perceived Price Fairness and the Mediating Effect of Customer Satisfaction: Case Study on Telecommunication Sector of Pakistan

The aim of this study is to investigate the Impact of Brand Image, Service Quality and Trust on Customer Loyalty, Moderating Effect of Perceived Price Fairness and the Mediating Effect of Customer Satisfaction on telecommunication sector of Pakistan. This research is helpful to capture and retain the satisfied and loyal customer and it is useful to identify the factors through which telecommunication sector may improve its performance. The survey research design method was used in this study. It involves a questionnaire for the collection of data from the respondents. Convenience-based Sampling was used in this research data was collected with the help of a questionnaire from 250 customers in the telecommunication sector of Pakistan (Warid, Zong, Mobilink, and Ufone Telenor). Correlation analysis was conducted utilizing SPSS to analyze the data. It is revealed that the correlation between customer loyalty and three independent factors that are quality service, brand image, and trust is very strong and mediator customer satisfaction in this relationship had an effect on customer loyalty. There exists a strong relationship between three dimensions of independent variables and the dependent; we can say that there is a strong effect of a mediator and moderator on these relationships. There is also a very strong correlation between customer loyalty and customer satisfaction.

The Effect of Perception Quality/Price of Service on Satisfaction and Loyalty Algerians Customers Evidence Study Turkish Airlines

This study aims at tackling theoretically and empirically the effect of service quality and price on the satisfaction and loyalty customer towards Turkish Airline. Having determined the main service variables surround Airline services field. We came up with the conceptualization a model to proceed that to analyze the effect of perceived quality of service and price on satisfaction and loyalty Algerians customers. The model is tested on a sample of 300 respondents. We chose to analyze the model using structural equation model SEM. The result confirms our hypotheses that the service quality effect on customer satisfaction. As well as Satisfaction effect on his loyalty to the company. The perceived price fairness affects the satisfaction and the weak impact on loyalty.

AN APPLIED STUDY ON THE CUSTOMER RETENTION DYNAMICS OF ORGANIZED READY-TO-WEAR TEXTILES RETAILERS IN REAL AND VIRTUAL MARKETS IN TURKEY

Purpose - This descriptive field study aims to reveal customer retention strategy formulation insights among top level marketing professionals of the organized ready-to-wear textiles retailers, who are members of United Brands Association (BMD) both active in off-line and online channels, in the Turkish market. Methodology - Regarding the literature review conducted a research model with seven variables was proposed, and depending on the proposed research model, six hypotheses were formulated. The research is conducted by a questionnaire which has been applied on-line, by e-mail, post; which is designed specifically to test the proposed relationships, namely the hypotheses constructed. Factor analysis has been conducted to reveal the dimensionality of the variables in the research model. In this regard, principle component analysis using Varimax rotation was performed and the reliabilities of the scales have been assessed by alpha coefficient. Depending on the results of the factor analysis, correlation and regression analyses have been used to test the hypotheses of the study. Findings - Results indicate that perceived product quality, service support and complaint handling, customer experience and suggestions provided and perceived price fairness have significant and positive effects on customer satisfaction. Furthermore, customer satisfaction, trust towards service provided, trust towards company and brand, corporate reputation and corporate social responsibility have significant and positive effects on customer retention. Conclusion - The outcomes and findings of the study were found to support the objectives of the study and the results of the statistical analysis were found to accept hypotheses of the study. Perceived product quality, perceived service quality, perceived price fairness, trust and corporate image are some vital challenges for customer retention.

A Study on the Effects of Hair salon Service Quality on Consumer Perception of Price Fairness and the Intent to Revisit: Focusing on the Busan area

This study attempted to determine the effects of the quality of cosmetology services on consumer price fairness perceptions and their intention to revisit the establishment. For this, a questionnaire survey was conducted among 330 customers of beauty salons in Busan, and the results were collected and analyzed. The study results found the following: To examine the mediating effects of price fairness, furthermore, a hierarchical regression analysis and structural modeling were performed. The results found that all hypotheses but H4 and H6 were adopted, which shows that service quality has a positive effect on revisit intention with price fairness as a mediator. The rejection of H4 means that the respondents at age 40 or older are not as sensitive to price as long as the skill level is deemed high. In addition, the rejection of H6 represents that those who spend a lot of money (KRW 50,000 or more per month) on their hairstyling are willing to pay a high bill provided that the skill level is high. Therefore, differentiated services for such customers who are willing to pay a high price should be included in beauty salon management strategies.

The impact of dynamic bundling on price fairness perceptions

With the increased availability of consumer-specific data and the ease of changing prices, firms more frequently use dynamic pricing where products are priced at an individual level based on individual consumer information. Dynamic pricing can effectively extract consumer surplus and increase firm profitability. However, it also arouses consumer unfairness perceptions. Three studies demonstrate that the use of bundling in combination with dynamic pricing (dynamic bundling) can reduce consumer unfairness perceptions. The negative effects of dynamic pricing are mitigated by bundling. A bundle enhances perceived transaction dissimilarity thereby reducing consumers’ comparison intentions leading to greater price fairness perceptions.