Quantity surcharges and consumer awareness in a new retail environment

Palla, Polyxeni; Boutsouki, Christina; Zotos, Yorgos

doi:10.1108/09590551011037563

Cited by 7 publications

(6 citation statements)

References 47 publications

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“…The current study focuses on the existing literature exploring unit pricing of multiple brand sizes. Most of these studies were field studies aimed to measure the rate of occurrence of QS in several product categories sold in supermarkets (Agrawal et al, 1993;Cude and Walker, 1984;Dunphy, 2016;Gerstner and Hess, 1987;Gupta and Rominger, 1996;Manning et al, 1998;McGoldrick and Marks, 1985;Nason and Della Bitta, 1983;Palla et al, 2010;Sprott et al, 2003;Walker and Cude, 1984;Widrick, 1979aWidrick, , 1979bZotos and Lysonski, 1993). The average QS incidence rate reported by these studies varied widely among product categories: e.g.…”

Section: Literature Reviewmentioning

confidence: 99%

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

Shirai

Satomura

2021

EJM

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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.

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Section: Literature Reviewmentioning

confidence: 99%

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

Shirai

Satomura

2021

EJM

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“…Unfortunately, results were inconclusive, and the authors note that "a single, simple explanation for surcharges does not exist". Palla et al (2010) conducted store audits and surveyed customers in Greece for the purpose of examining the evolution of the quantity surcharge phenomenon "in the new, retail environment". Their study is similar to this study, in that it compares two sets of surcharges approximately 20 years apart.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Researchers have found that private label brands have higher contribution margins, thus offering retailers an incentive to expand their use of this product category (Hoch and Banerji, 1993;Gomez and Benito, 2008). Still, it should be noted that because the private label offering typically is limited to one size (Palla et al, 2010), it is unclear precisely how these products effect surcharging.…”

Section: Data Interpretationmentioning

confidence: 99%

Quantity consumer goods pricing: has yesterday’s surcharge become today’s discount?

Dunphy

2016

JPBM

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Purpose This study aims to extend by way of replication an earlier study, “Blind man’s bluff: The ethics of quantity surcharges” (Gupta and Rominger, 1996) by testing several hypotheses regarding changes in the surcharging phenomenon that may have occurred over time. Design/methodology/approach The original study was constructed from data collected 20 years ago. This study went beyond a mere replication. A key difference between this study and the original study was in the method of data collection. In the earlier study, students were used to collect data. In this study, the author personally and carefully recorded the prices of the same 60 items that were noted in the original study. These new prices were then compared with the original ones. Several matched paired t-tests were administered to analyze the mean differences between the two sets of data. Findings The tests showed a highly significant difference in today’s pricing structure in comparison to the quantity surcharging phenomenon from the prior study. It was found that both the quantity of the items surcharged and the magnitude of the surcharges decreased in comparison to the surcharging reported in the original study. Research limitations/implications Reasons are given regarding what changed and why and suggestions are given for future research in the areas of private or in-store branding, the proliferation of “big box” stores and the changes in the frequency and magnitude of surcharging that may be occurring over time. Originality/value This study indicates that the quantity surcharging phenomenon has lessened. In fact, in mature markets which include big box discounters, the quantity surcharging phenomenon of 20 years ago may have given way to today’s quantity discount.

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“…loyalty programs (Lewis, 2004), customer discount card usage (McIlroy and Barnett, 2000)), encourage purchase of products near expiry date (Sezen, 2004), stimulate large purchases or expedite payment (e.g. quantity discounts and payment terms (Weber et al , 1991)), and encourage purchasing of high/low quantities (Palla et al , 2010). Yet considerably less is known about the nature of subjective price accommodations, which sales associates often provide customers on their own volition and without managerial approval (Rosenbaum et al , 2012; Walsh, 2013).…”

Section: Literature Reviewmentioning

confidence: 99%

An exploratory analysis of social commonalities and subjective discounts

Rosenbaum

Massiah

Wozniak

2013

International Journal of Retail &Amp; Distribution Management

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PurposeThis article seeks to illustrate how social commonalities between employees and their customers often result in customers believing that they are entitled to discounts in retail settings.Design/methodology/approachThis study employs survey methodology to reveal the extent to which various social commonalities between customers and service providers encourage customers to believe that they are entitled to financial discounts.FindingsThe findings show that commonalities may cause customers to adhere to narcissism – that is, many customers may expect discounts even when they know that employees may jeopardize their jobs by providing them.Research limitations/implicationsCustomer relationships dramatically change with commonalities, as customers believe that social relationships propel them to “best customer status” and that they are entitled to discounts.Practical implicationsCustomers who become increasingly connected with employees expect relational benefits that usually require time to develop. Retailers that encourage their employees to develop social media bonds with their customers must realize that customers desire to be financially rewarded for maintaining these linkages.Originality/valueThis work reveals that customers who maintain social commonalities with employees expect to receive some type of financial benefit from doing so.

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Quantity surcharges and consumer awareness in a new retail environment

Cited by 7 publications

References 47 publications

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

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

Quantity consumer goods pricing: has yesterday’s surcharge become today’s discount?

An exploratory analysis of social commonalities and subjective discounts

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