The role of individual service and team-based service price in the online environment: A view from the price difference

Abstract

Different from the traditional medical market, the online medical market allows physicians considerable discretion in setting prices of their services, which is beginning to be paid close attention to. Physicians face a challenge with the introduction of various service styles. Guided by transaction utility theory and price fairness, this study aims to investigate the influence of pricing strategy on service demands from the price difference perspective by focusing on two typical service models: individual service and team-based service. Moreover, team characteristics (response speed and team size) are also considered. The data collection was done in March 2018 and repeated in May 2018, and physicians who provide both individual service and team-based services are included in our study. Finally, a dataset consisting of 1,100 teams with 1,100 physician leaders from 14 departments such as obstetrics and gynecology department were collected from an online medical platform in China. Empirical results support most of our hypotheses. A negative influence of team-based price was observed. As a substitute service, a higher individual service price will make patients turn to team-based service. Moreover, individual service prices negatively moderated the relationship between team-based service prices and demands. By calculating the price difference between the individual service price and the team-based service price, we found a negative role of the price difference affecting patient purchase decisions. Although we did not find a significant effect of team size, a quick response can attract more patients. Price fairness provides a proper framework for understanding pricing strategy in individual and team-based service in an online environment. Understanding the effects of prices from a price difference perspective has both theoretical and practical contributions. Specifically, this study contributes to knowledge on price fairness, online medical platforms, and virtual teams, and provides management suggestions.