Perceived Price Fairness Research Articles

Evaluation of factors affecting customer loyalty in the restaurant industry

The aim of the present research was to investigate the factors affecting customer loyalty in the restaurant industry. Data was collected using questionnaire distributed in 10 randomly selected branches of Boof Chain Restaurant in Tehran. In each branch, 40 customers were selected for the study. Ultimately, the research sample consisted of 268 customers. Structured equation modeling was used for data analysis and hypothesis testing. The obtained results show that food quality, service quality, restaurant environment, and perception of price fairness had a positive impact on customer satisfaction, but the impact of restaurant location on customer satisfaction was not confirmed. Also, food quality, service quality, and perception of price fairness had a positive effect on customer trust. The results show that food quality is the most important factor affecting customer satisfaction and trust in Boof Chain Restaurants. Customer satisfaction had a positive impact on customer loyalty, but the effect of customer trust on customer loyalty was not confirmed. Key words: Restaurant industry, loyalty, customer satisfaction, customer trust.

Impact of a Brand Image Matching with the Advertising Model on Price Fairness Perceptions: Focus on Sports Advertising

Impact of a Brand Image Matching with the Advertising Model on Price Fairness Perceptions: Focus on Sports Advertising

The determinants of consumer attitude toward service innovation – the evidence of ETC system in Taiwan

PurposeInnovation has attracted considerable interest in recent years in improving competitive advantage for both profit and nonprofit organizations. Service innovation offers the potential for substantially improving the performance, but performance gains are often obstructed by users' unwillingness to accept and use available systems. This research aims to use the concept of Reasoned Action Theory to further examine consumer attitudes toward service innovation and its antecedents.Design/methodology/approachBy focus group discussion and literature review, a conceptual model with six postulated hypotheses is proposed. The Electronic Toll Collecting (ETC) system launched by the Taiwanese government is selected as the service innovation to test the model. A structured questionnaire is designed to collect field data. The structural equation model with LISREL VIII program is used to estimate the structural coefficients and to test the hypotheses.FindingsThe results show that perceived ease of use, perceived price fairness, risk averseness and satisfaction with existing service significantly influence consumer attitude, and then influence consumer's intention to adopt service innovation.Practical implicationsBefore introducing a service innovation, the service provider must seriously consider the possible difficulties of usage and risk from the consumer's perspective.Originality/valueCompared with product innovation, research focusing on service innovation is relatively scarce. Services have specific characteristics of intangibility, inseparability, heterogeneity and perishability. Hence, the factors influencing the consumer adoption of service innovation may be different from those of product innovation.

When a promotion is denied: the effects of decision stage on perceptions of promotion and price fairness

Marketers frequently use promotions to enhance sales and increase consumers’ perceptions of value. However, most promotions usually come with restrictions, such as time expiration, quantity or product model restriction, etc. In the present research, the effect of the stage in the purchase process when the consumer finds out about the restriction is investigated. The findings indicate that the later in the purchase process the consumer discovers the restriction, the greater is the perception that the effort invested into the purchase is wasted, consequently resulting in lower promotion and price fairness. This effect is mediated through the feeling of entitlement to the promotional price and the inferred negative retailer’s motive for the promotion. Theoretical and managerial implications are also discussed.

Perceived price fairness of dynamic pricing

PurposeThis study aims to adopt illusion of control and lateral consumer relationship in order to investigate their effects on price fairness in online auction and group buying context. These two variables have been known to have strong influences in fairness perception on consumers' decision‐making processes and outcomes.Design/methodology/approachThe authors draw their conceptual foundations from previous studies, supplement this from the electronic commerce literature, and test the model through laboratory experiments.FindingsThe study demonstrates that consumers' perception on illusion control in price determination and advantageous lateral consumer relationship significantly affect price fairness perception in both the online auction and group buying environments.Research limitations/implicationsThe findings are expected to provide researchers with useful insights to conduct future studies on uncovering the nomological networks associated with price fairness perception.Practical implicationsThe findings are expected to help managers develop better pricing strategies and design effective dynamic pricing mechanisms.Originality/valueThe paper provides the first integrated perspective on the human decision processes in the dynamic pricing environment in electronic markets.

Moderating effects in consumers' perceptions of price unfairness

AbstractThis study explores the moderating effects of various consumer features – such as price insensitivity and recency of last purchase – on the relationships among perceived value, inferred vendor profit, and perceived price fairness. A proposed model is developed and an empirical study is then conducted among consumers in four contexts: (i) two tangible goods; and (ii) two intangible services. The proposed model and hypotheses are tested using Partial Least Squares (PLS) software SmartPLS 2.0.M3, which provides a component‐based approach for estimation purposes. The influence of these moderating variables (price insensitivity and recency of the last purchase) depends on the context and the nature of the offering. This is a pioneering study of perceived price fairness in a framework of distributive justice utilizing a variety of contexts, products, and services.Copyright © 2010 John Wiley & Sons, Ltd.

Customers' perceptions about concerts and CDs

PurposeTaking into account the increasing prices of attending concerts and gigs and the decreasing prices and better sound quality of CDs and music in file‐computer format, is the future of music events threatened by music CDs? Are clients' perceptions about concerts and CDs very different? This study aims to answer these research questions by comparing important perceptions of concert attendees and CD buyers.Design/methodology/approachAn empirical study is conducted in two different contexts: CD buyers and concert attendees. In order to answer the research questions outlined the most appropriate statistical tool is the student's t‐test. The variables to compare do not have normal distributions; therefore, non‐parametric tests have been conducted to confirm the results. In addition, a discriminant analysis has been applied in order to assure that both consumers sub‐samples differ with regard to the variables used in the study.FindingsThe future of music events is not threatened at all by music CDs. On one hand, the concert industry has been increasingly making more profits in many countries in last decade. On the other hand, consumer satisfaction, price fairness perception, willingness to pay, customer value, and product/service quality are significantly more highly ranked in concert attendees than in CD buyers. The statistical analyses show clients' perceptions about concerts and CDs are very different. All the variables analysed except image have been significantly different in both sub‐samples of consumers.Originality/valueThis paper examines customer perceptions of two of the most important sectors in the music industry: concerts and CDs, using variables that directly measure these perceptions. It is crucial for music managers to understand motives and feelings of music consumers of these basic sectors in order to make appropriate decisions.

The influence of corporate social responsibility and price fairness on customer behaviour: evidence from the financial sector

This paper explores how customers' perceptions of firms' corporate social responsibility (CSR) and fairness in their pricing strategy determine customers' behaviour as users of financial services. Specifically it proposes a model where CSR and price fairness positively determine customer loyalty through satisfaction and commitment. It also proposes that the entity's social responsibility actions influence customers' price fairness evaluations. To test this model, structural equation modelling is employed on a sample of 300 customers of banks and savings banks. Results show that both CSR and price fairness contribute to achieving customer loyalty, also confirming the roles of satisfaction and commitment as mediating variables. In addition, it is also shown that CSR influences customer perceptions of price fairness, in such a way that customers perceive that socially oriented firms are also fairer in their pricing strategies. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.

Fairness of prices, user fee policy and willingness to pay among visitors to a national forest

Imposing user fees in Nature-Based Tourism (NBT) contexts has been a controversial issue. Based on the notions of justice and fairness, this study extended previous work examining the relationship between attitudes toward user fees and spending support. In a proposed structural model of price fairness, fee spending support, and willingness to pay (WTP), this paper identified the antecedents of WTP user fees, and empirically examined to what extent the data fit the model. Furthermore, the moderating role of place attachment in the model was investigated by using multiple-group structural equation modeling. Subjects (n=562) were recreational tourists to a forest area in the southeast U.S. Results revealed that spending support partially played a mediating role in the relationship between perceived price fairness and WTP user fees. A multiple-group invariance test also demonstrated that while the degree of place identity moderated the effect of price fairness on spending support, the degree of place dependence did not influence the relationships among the antecedents of WTP.

Perceived price fairness and price decay in the DVD market

PurposeThis study aims to examine perceived price fairness, actual pricing and price decay in a short‐life cycle market; namely DVD films.Design/methodology/approachThe prices of six UK retailers for a range of films released over the last 18 months were examined and compared with the perceived perception of fair price of a questionnaire sample of over 500 UK adults.FindingsConsumers perceive a DVD to lose value of more than 50 per cent in the first year, but this price decay is not reflected in the actual pricing of the DVDs. Prices for newer DVDs are relatively consistent between retailers of the same channel type, but there are large price differentials for older and/or more specialised items.Research limitations/implicationsThis study is exploratory in nature, and a larger scale study of the phenomenon of price decay of digital short‐life cycle products such as DVDs is desirable.Practical implicationsThe findings suggest that there is a considerable gap between actual prices and perceived fair prices of DVDs, especially for older items. DVD producers and retailers may need to consider adjusting their prices to bring them more in line with customer expectations. The large gap between actual prices and perceived fair prices also has important implications for brand management.Originality/valueSo far, no research has been undertaken which investigates perceived fair price and actual pricing of DVDs. Furthermore, the issue of consumer‐perceived price decay has largely been ignored in previous research. Both perceptions of price fairness and perceived price decay are important considerations for pricing policies. This study attempts to address this gap.

Suspicion and Perceptions of Price Fairness in Times of Crisis

Times of crisis bring about increased demands on businesses as shortages, or unexpected but significant, business costs are encountered. Passing on such costs to consumers is a challenge. When faced with a retail price increase, consumers may rely on cues as to the motive behind the increase. Such cues can raise suspicion of alternative motive (e.g., taking advantage of the consumer) affecting consumers’ judgments of price fairness. This research investigates two triggers of suspicion: salience of alternative motives, and behavior judged to be out-of-character for the business. Results of the two studies within crisis contexts indicate that suspicion is created when alternative motives are salient and when a retailer acts out-of-character. Multiple group analyses revealed that suspicion induced negative affect and subsequent perceptions of price fairness. When suspicion was present, more negative feelings toward the retailer and judgments of price unfairness resulted.

Is a good deal always fair? Examining the concepts of transaction value and price fairness

Previous research has shown that if consumers are aware that they are paying more than another customer for a similar transaction, then they may perceive the price to be unfair. A concept closely related to fairness is transaction value, defined as consumers’ perceptions of the psychological satisfaction or pleasure from taking advantage of a price deal. In this research, we conceptualize that although consumers’ perceptions of price fairness and transaction value share many similarities, nevertheless there are also important differences. Using three studies, we empirically examine these differences. We show that although a “bad deal” is typically perceived to be an unfair price, a “good deal” is not necessarily perceived to be the fairest price.

Corporate social responsibility and consumers' perception of price

PurposeThis study intends to investigate whether corporate social responsibility (CSR) would positively influence the benefit and the value perceived by the consumer in the company's offer, the judgment of fairness in the price differential charged for it, and his/her buying intention, in a context where the socially responsible firm practises a price higher than the competition. It also investigates whether a social action, supported by the firm, with direct impact on the consumer's life, would provoke a higher effect in his/her reactions than a social action with indirect impact.Design/methodology/approachThe objectives were achieved through experimental methodology, using scenarios. Prior studies contributions to CSR and consumer behavior domains and the theoretical framework supporting the model of perceived value generated the study's proposition, which was translated in a set of hypotheses.FindingsThe results obtained indicated that consumers perceived greater benefit and value in the offer of the socially responsible firm, and were showed to be willing to pay 10 percent more for its product, judging this price differential as being fair. Moreover, the social action with direct impact on the consumer's life influenced more positively his/her reactions than the social action with indirect impact.Research limitations/implicationsThe research instrument opens up the possibility for people to try to give answers that are in accordance with socially established rules and conventions. Also, a non‐probabilistic convenience sample was adopted. Issues for future studies are: price sensitivity in the context of CSR; the importance of CSR as a factor of influence in buying decision compared with other factors; variables that could exert influence on the impact of CSR on consumers' reactions; the influence of information sources about CSR in the consumer's buying decision.Practical implicationsThe results of the study indicate that companies have the opportunity to respond to their consumers' desires of feeling good about a purchase (incentivating CSR), while achieving their business goals and, simultaneously, giving their own contribution to society. Also, when deciding on the social project to invest, firms should try to know which social actions are more valued by their consumers, which are those they judge to benefit them more directly.Originality/valueThe results achieved the integration of CSR in the field of perception of price fairness, as one motive that contributes to a price differential be judged as fair. As a part of the study, a measurement scale was elaborated and tested for the variable perceived benefit.

Las asociaciones de la imagen como determinantes de la satisfacción en el sector bancario español

This paper analyses the influence that image associations have in the perceptions and satisfaction with the Spanish bank industry. For that, the role of location, personnel, social responsibility and perceived price fairness as determinants of global impression and satisfaction with the entity is examined. Moreover, it also studies if socio-demographic variables and the fact that the client is customer of a traditional or saving bank moderate the relationships. To fill these aims, structural equation modeling is employed with a sample of 300 clients of the Spanish banking industry. Results show different paths of influence of the associations over the satisfaction. Besides, differences among segments are found, what highlights the importance of offering differentiate services in this market.

How Do Price Fairness Perceptions Differ across Culture?

This research investigates the effects of across-consumer price comparisons on perceived price fairness as a function of culture. Collectivist (Chinese) consumers are more sensitive to in-group versus out-group differences than individualist (U.S.) consumers. The collectivist perspective orients consumers toward the in-group and heightens concerns about “face” (i.e., status earned in a social network) that arise from in-group comparisons. Process evidence for the causal role of cultural differences derives from manipulated self-construal and measurement of the emotional role of shame evoked by face concerns. Finally, in a robustness test, an alternative operationalization of the in-group/out-group distinction extends the findings to the context of firm relationships.

The Influence of Price Change on Consumer Perceptions of Price Fairness: Focused on Roles of The Types of Price Change and Self-Regulatory Focus

The Influence of Price Change on Consumer Perceptions of Price Fairness: Focused on Roles of The Types of Price Change and Self-Regulatory Focus

Consumer Reactions to CSR: A Brazilian Perspective

In this research, we evaluate the response of Brazilian consumers to corporate social responsibility (CSR) initiatives accompanied by a price increase. We demonstrate that the extent to which Brazilian consumers perceive a company to be socially responsible (i.e., their CSR perceptions) is related to both the basic transactional outcome of purchase intentions as well as two relational outcomes: the likelihood to switch to a competitor and to complain about the CSR-based price increase. More interestingly, we find that these relationships are jointly mediated by the consumers’ perceptions of price fairness and feelings of personal satisfaction. Perhaps most interesting, we find that these mediating effects vary with consumer purchasing power; the mediating effect of price fairness on purchase intention is stronger for lower income than for higher income consumers, whereas the mediating effects of personal satisfaction on switching and complaining intentions are stronger for higher income than for lower income consumers.

Internet differential pricing: Effects on consumer price perception, emotions, and behavioral responses

Differential pricing is a strategy that retailers have used effectively in capturing sales and profits. The advent of the Internet is a new domain where this strategy can be applied conveniently and economically. This study examines the effects of various Internet differential pricing tactics (buyer identification, purchase quantity, purchase timing, and multi-channels) on consumers’ cognitive (i.e., perceptions of price fairness), emotional, and behavioral responses. A survey on 367 marketing students in Taiwan was carried out. Empirical findings show that perceived fairness is significantly related to emotions, and while emotions similarly affect behavioral responses, it also mediates the relationship between perceptions of price fairness and behavioral responses. Practical implications and future studies for internet pricing strategies are further discussed.

Concepts of price fairness: empirical research into the Dutch coffee market

This paper researches perceptions of the concept of price fairness in the Dutch coffee market. We distinguish four alternative standards of fair prices based on egalitarian, basic rights, capitalistic and libertarian approaches. We investigate which standards are guiding the perceptions of price fairness of citizens and coffee trade organizations. We find that there is a divergence in views between citizens and key players in the coffee market. Whereas citizens support the concept of fairness derived from the basic rights approach, holding that the price should provide coffee farmers with a minimum level of subsistence, representatives of Dutch coffee traders hold the capitalistic view that the free world market price is fair.

Incentive mechanisms, fairness and participation in online group-buying auctions

The main idea of an online group-buying auction is to recruit enough people to generate a sufficient volume of orders to create the basis for a lower transaction price. Typically, the larger the number of orders, the more consumers will wish to participate. This is because the final auction price is likely to be lower than it would be otherwise. This positive feedback is a demand externalities phenomenon. Nevertheless, there also is a phenomenon of inertia that often occurs at the beginning of online group-buying auctions. Due to the small number of orders that occur in the beginning of an online group-buying auction, many potential participants are inclined to wait until the auction price for the sale item falls to an acceptable level. This only comes through the participation of more people in the auction. As a result, consumers will tend to wait for one another to join the auction. Thus, the startup inertia must be overcome before the number of orders will increase. We explore three incentive mechanisms to address this problem: sequence-based, time-based and quantity-based incentives. We conducted a series of experiments using an online group-buying auction experimental test bed deployed on the Internet to develop deeper insights into how these incentives work in the context of bakery cookie sales. Using theory to represent a variety of decision-making perspectives that can be applied in the online group-buying auction context, we explore whether the different incentive mechanisms cause consumers to perceive a lack of price fairness and procedural fairness in an auction's operations. Our results suggest that consumers view participation discounts as creating the basis for perceptions of greater price fairness in online group-buying auctions. Compared with other incentive mechanisms, a sequence-based incentive mechanism gives consumers a sense of less procedural fairness. Finally, perceptions of fairness tend to have a positive association with price satisfaction and purchase intention.