The impact of dynamic bundling on price fairness perceptions

Li, Wenjing; Hardesty, David M.; Craig, Adam

doi:10.1016/j.jretconser.2017.10.011

Cited by 37 publications

(38 citation statements)

References 42 publications

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“…This research is expected to help sellers reduce the unfairness pricing perception for consumers. Given the combination of dynamic pricing with bundling shows the possibility of a broader strategy for sellers who uniquely adjust the offer to each consumer (Li et al, 2018) [28]. Thus the research findings will fill in the gab in previous marketing research related to pricing strategies and their impact on price unfairness and consumer loyalty.…”

Section: Introductionmentioning

confidence: 86%

“…Definition of dynamic pricing is a strategy of applying different prices to products or services that are similar by adjusting time, events, places and characteristics of consumers (Haws & Bearden, 2006[22]; Li et al, 2018) [28]. The application of dynamic pricing strategies is based on the reality that consumers are heterogeneous.…”

Section: Dynamic Pricingmentioning

confidence: 99%

“…The application of dynamic pricing strategies is based on the reality that consumers are heterogeneous. Therefore consumers usually have the maximum ability to price the product or service they are willing to pay or what is called the reservation price (Wang et al, 2007[40]; Li et al, 2018) [28]. Thus, the setting of the same price on the same product / service, for consumers who are different, may not be an optimal pricing strategy.…”

Section: Dynamic Pricingmentioning

confidence: 99%

“…This is a trade between making a consumer surplus versus the price unfairness in the eyes of consumers. Many sellers now set their strategy through dynamic bundling, which combines dynamic pricing with bundling (Li et al, 2018) [28]. Furthermore, Li et al (2018) [28] states that dynamic bundling is a pricing strategy where the price of a product changes when the focus product is bundled with additional products.…”

Section: Introductionmentioning

confidence: 99%

“…Many sellers now set their strategy through dynamic bundling, which combines dynamic pricing with bundling (Li et al, 2018) [28]. Furthermore, Li et al (2018) [28] states that dynamic bundling is a pricing strategy where the price of a product changes when the focus product is bundled with additional products. Bundling is defined as the sale of two or more different products in one package (Stremersch & Tellis, 2002) [37].…”

Section: Introductionmentioning

confidence: 99%

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The Role of Dynamic Pricing and Dynamic Bundling on Unfairness Pricing Perceptions

Purwanto¹

2018

International Journal of Management Excellence

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This study aims to analyze the influence of dynamic pricing and dynamic bundling on the unfairness pricing perception which ultimately determines the level of general authority in buying a product / service. 340 respondents were made as samples after going through the screening process. The results of the analysis found that dynamic pricing has a significant effect on the unfairness pricing perception. Second, dynamic bundling has no significant effect on the unfairness pricing perception. Third, unfairness pricing perceptions caused by dynamic pricing have no significant effect on satisfaction. Finally, the unfairness pricing perception caused by dynamic bundling has a significant effect on satisfaction.

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Section: Introductionmentioning

confidence: 86%

Section: Dynamic Pricingmentioning

confidence: 99%

Section: Dynamic Pricingmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

The Role of Dynamic Pricing and Dynamic Bundling on Unfairness Pricing Perceptions

Purwanto¹

2018

International Journal of Management Excellence

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Many a little makes a mickle: Why do consumers negatively react to sequential price disclosure?

Totzek

Jurgensen

2020

Psychology and Marketing

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Drip pricing (DP) is distinct from partitioned pricing as it sequentially discloses surcharges to consumers. Critics see DP as a deceptive pricing tactic because it obscures the final price of an offer. We examine the effects of the timing of the final price disclosure and the number of sequentially presented surcharges on consumers' attention to the final price and, ultimately, perceived price fairness. In an eye-tracking study with 225 participants, we find that the sequential (vs. up-front) disclosure of the final price lowers perceived price fairness by increasing consumers' attention to the final price, in particular, when the number of surcharges is high. In addition, the sequential disclosure of the final price lowers perceived price fairness because of higher perceived price complexity and lower pricing transparency perceptions. The findings suggest that firms need to be aware of both attentional and cognitive effects of the final price disclosure when designing DP. K E Y W O R D S behavioral pricing, drip pricing, electronic commerce, eye tracking, partitioned pricing, price fairness 1 | INTRODUCTION Rather than dealing with single all-inclusive prices, consumers frequently face complex price information consisting of multiple price components (e.g., Greenleaf et al., 2016). For example, partitioned pricing (PP) tactics, that is, dividing the total price of an offer into a base price and mandatory surcharges, are particularly popular in many services and retailing contexts (e.g., Abraham & Hamilton, 2018; Morwitz et al., 1998). Furthermore, customers now often face drip pricing (DP; Ahmetoglu et al., 2014), which is a pricing tactic in which firms advertise the base price of an offer up front while several additional charges sequentially "drip" in after the initial choice. Whereas price bundling integrates different products or services (e.g., Li et al., 2018), DP disentangles the price components of an offer to make it appear less expensive. DP has become popular in industries such as transportation, hospitality, and financial services. Firms may use DP for two major reasons. First, firms may advertise their offer at a low base price and then sequentially add mandatory fees, suggesting a deal up front (Seim et al., 2017; Shelanski et al., 2012) and thus obfuscating the real final price (e.g., Chioveanu & Zhou, 2013). Second, they may want to make single price components salient to attract their customers' attention. For example, showing a fairly high price for on-board meals might positively affect the customers' quality perceptions of an airline (Bertini & Wathieu, 2008). In addition, increasing the salience of surcharges and cueing them to an external locus of causality (e.g., a tourist tax) can influence customers' blame attributions in case of a price increase (Pallas et al., 2018). DP has become a concern for regulators around the world. Consumer protection authorities such as the Federal Trade Commission (FTC) have criticized DP tactics, urging firms to disclose mandatory surcharges "immediately a...

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The Influence of Thinking Styles on Perceived Price Fairness: An Experimental Study

Shaw

2019

Marketing and Smart Technologies

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Customers expect pricing practices to be fair, they are specifically sensitive to price increase considered unfair or unacceptable, which eventually influences both behavioural intentions and emotions. Substantial investments are deployed in building positive associations with consumers, which can be subverted by the incident of price increase leading to unfairness perceptions. It is significantly important to mitigate the perceived unfairness perceptions, given the stakes involved. This article investigates the role that styles of thinking (holistic versus analytic) plays in perceived price fairness. The findings of this research show that styles of thinking play a significant role in influencing perceived price fairness. When exposed to negative and/or undesirable events such as price increase, styles of thinking influence cognitive attribution, which, in turn, influences price fairness perceptions. This research adds to the growing literature in price fairness by exploring the influence of thinking styles on perceived price fairness that has not been examined before. These findings suggest that strategies to influence styles of thinking could be useful in managing perceived unfairness perceptions. Marketers and managers could utilise marketing-management strategies based on findings of this research to maintain positive consumer's perception of price, thereby will improve firms' performance, in terms of, value, profitability and sales.

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The impact of dynamic bundling on price fairness perceptions

Cited by 37 publications

References 42 publications

The Role of Dynamic Pricing and Dynamic Bundling on Unfairness Pricing Perceptions

The Role of Dynamic Pricing and Dynamic Bundling on Unfairness Pricing Perceptions

Many a little makes a mickle: Why do consumers negatively react to sequential price disclosure?

The Influence of Thinking Styles on Perceived Price Fairness: An Experimental Study

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