Price Salience And Product Choice
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Price Salience And Product Choice
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Author : Thomas C. Blake
language : en
Publisher:
Release Date : 2018
Price Salience And Product Choice written by Thomas C. Blake and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with Consumer behavior categories.
We study the effect of price salience on whether a product is purchased and, conditional on purchase, the quality purchased. Consistent with our theoretical predictions, we find that making the full purchase price salient to consumers reduces both the quality and quantity of goods purchased. The effect of salience on quality accounts for at least 28% of the overall revenue decline. Evidence shows that the effects persist beyond the first purchase and impact even experienced users. Detailed click-stream data shows that price-obfuscation makes price comparisons difficult and results in consumers spending more than they otherwise would. We also find that sellers respond to the increased price obfuscation by listing higher quality tickets.
Salience And Consumer Choice
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Author : Pedro Bordalo
language : en
Publisher:
Release Date : 2012
Salience And Consumer Choice written by Pedro Bordalo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with Consumer behavior categories.
We present a theory of context-dependent choice in which a consumer's attention is drawn to salient attributes of goods, such as quality or price. An attribute is salient for a good when it stands out among the good's characteristics, in the precise sense of being furthest away in that good from its average level in the choice set (or more generally, an evoked set). A local thinker chooses among goods by attaching disproportionately high weights to their salient attributes. When goods are characterized by only one quality attribute and price, salience tilts choices toward goods with higher ratios of quality to price. We use the model to account for a variety of disparate bits of evidence, including decoy effects in consumer choice, context-dependent willingness to pay, balance of qualities in desirable goods, and shifts in demand toward low quality goods when all prices in a category rise. We then apply the model to study discounts and sales, and to explain demand for low deductible insurance.
Consumer Reactions To Price Quantity Tactics
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Author : Jun Yao
language : en
Publisher:
Release Date : 2015
Consumer Reactions To Price Quantity Tactics written by Jun Yao and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
Marketers employ a variety of pricing tactics such as pennies-a-day, price matching, price partitioning, everyday low pricing and comparative price claims. This thesis adopts the term "tactics" to delineate the marketing strategies that utilize price and quantity (which here specifically refers to the volume or size of a single product) to influence consumer behaviours. There is an emerging research stream examining how consumers respond to various price-quantity tactics. This thesis contributes to this literature by investigating consumer reactions to two different price-quantity tactics. The thesis consists of two independent essays.Essay one identifies and distinguishes between situations where product alternatives are framed with equal quantities and unequal prices where consumers actually compare product prices, and situations where alternatives are framed with equal prices and unequal quantities where consumers actually compare product quantities in order to make judgments and decisions. It examines how consumer comparative judgments and purchase decisions differ in these two situations, and examines the process underlying this effect. Drawing on multi-attribute loss aversion, essay one proposes a greater aversion to quantity loss than price loss among consumers. Results of a series of experimental studies show that the difference between competing brands having unequal sizes and equal prices (e.g., product A: $3.51/300ml versus product B: $3.51/330ml) is generally perceived as larger than the difference between competing brands having unequal prices and equal sizes (e.g., product A: $3.51/300ml versus product B: $3.19/300ml). However, this effect is reversed when equal-value attributes are removed from the comparison (i.e., removal of $3.51 for the former case and removal of 300ml for the latter case) and it is therefore context-dependent. Further, it demonstrates the moderating roles of numerical representation type (Pandelaere, Briers, & Lembregts, 2011) of the price/size differences on the comparative judgments. Finally, it shows that when product alternatives have unequal sizes and equal prices, this leads to a greater perceived difference in product values than when they have unequal prices and equal sizes. As a result, consumers favour the option which is framed as a bigger package, relative to the same option which is framed as a lower price, in product selection.Essay two identifies unit pricing (i.e., displaying unit costs on price tags) as an important price-quantity tactic associated with varying prices and sizes. It proposes a psychological model of how unit pricing affects consumer purchase decisions and tests it in the context of identical product quantities, explaining why the presence of unit price information makes consumers more inclined to choose products with lower unit prices in general. Prior research shows that the presence of unit price information in a grocery shopping context leads consumers to choose lower unit priced products. However, the process underlying this effect remains unclear. Essay two suggests that the unit pricing effect is both cognitively and motivationally driven as it makes it not only easier to find the cheaper options, but also creates a greater non-conscious desire to choose these options. The results from four experiments show that the motivational effect occurs even when products are identically sized. Results also indicate that the motivational effect of unit pricing operates independently of the cognitive effect and therefore is automatic. It finally shows that the motivational effect generalizes to the evaluation of price discounts and discovers a boundary condition where unit pricing actually decreases rather than increases price salience.
The Salience Of Marketing Stimuli
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Author : Gianluigi Guido
language : en
Publisher: Springer Science & Business Media
Release Date : 2001-04-30
The Salience Of Marketing Stimuli written by Gianluigi Guido and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001-04-30 with Business & Economics categories.
This book presents a theoretical approach for enhancing consumer processing and memory of marketing communication.
Product Choice And Price Discrimination In Markets With Search Costs
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Author : Natalia Fabra
language : en
Publisher:
Release Date : 2017
Product Choice And Price Discrimination In Markets With Search Costs written by Natalia Fabra and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with Competition categories.
In a seminal paper, Champsaur and Rochet (1989) showed that competing firms choose non-overlapping qualities so as to soften price competition at the cost of giving up profitable opportunities to price discriminate. In this paper we show that an arbitrarily small amount of search costs is enough to give rise to an equilibrium with overlapping qualities. In markets with search costs, competing firms face the monopolist's incentive to price discriminate, which induces them to offer the full quality range even if this forces them to compete head-to-head. Hence, even though search costs increase prices and reduce consumers surplus for given quality choices, search costs can also lead to lower prices and higher consumer surplus whenever they induce firms to offer broader and overlapping product lines. Our analysis also provides predictions regarding pricing by multi-product firms in markets with search costs under various retail market structures. Product choices and pricing by online bookstores motivate our findings.
No Alarms And Many Surprises
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Author : Omar Vásquez Duque
language : en
Publisher:
Release Date : 2020
No Alarms And Many Surprises written by Omar Vásquez Duque and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
Excessive pricing is one of the most debated theories in competition law and probably the main divide between the U.S. and European competition laws. However, even in jurisdictions in which excessive pricing is considering as an antitrust offense, there tends to be resistance to enforce excessive pricing provisions. This “hands-off” approach is based on the grounds that excessive prices self-correct, practical difficulties in measuring a competitive benchmark and identifying excessiveness, as well as the fear of distorting ex ante incentives to innovate and invest.With this article, I intend to inform the excessive pricing debate by exploring how consumers' bounded-rationality can justify antitrust intervention in particular cases that fall within the excessive pricing doctrine. Behavioral economics predicts complex contracts lead consumer demand to be a function of salience rather than the real value of products. This produces a divergence between the perceived value of goods and their real value, which drives sellers to compete solely on the former. Complexity hinders and distorts competition. In fact, complexity makes comparison shopping costlier and allows sellers to backload part of their prices to non- salient product attributes. Consumers only perceive a distorted price in salient product features, which leaves room for inefficient matching and opportunistic behavior given the risk of finding high hidden prices in non-salient product attributes. These are behavioral limits of competition.I review the literature concerning choice-strategies and consumer rationality and then illustrate my thesis by referring to a recent case that took place in Chile. I argue this example represents a paradigmatic case in which complexity and lock-in facilitate consumer exploitation and distort competition in the primary market -- following an aftermarket rationale. I argue that, dealing with opportunistic practices that stem from the inability of consumers to switch and are related to product attributes that were not policed by market forces, antitrust intervention would enhance competition on the real value of goods. Antitrust would correct a behavioral market failure.
Innovation In Pricing
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Author : Andreas Hinterhuber
language : en
Publisher: Routledge
Release Date : 2013-05-07
Innovation In Pricing written by Andreas Hinterhuber and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-05-07 with Business & Economics categories.
Pricing has a substantial and immediate impact on profitability. Most companies, however, still use costs or competition as a main basis for setting prices. Product or business model innovation has a high priority for many companies whereas innovation in pricing has received scant attention. This book examines how innovation in pricing can drive profits. The text examines innovation in pricing from four complementary perspectives. Innovation in Pricing Strategy illustrates how companies implement innovative pricing strategies, such as customer value-based pricing. Innovation in Pricing Tactics deals with innovative tools to measure and increase customer willingness to pay and to communicate value to B2B and B2C customers. Innovation in Organizing the Pricing Function looks at state-of-the art approaches to embed the pricing function in the organization. Psychological Aspects of Pricing illustrates how companies can influence customer perceptions of value and price in their question to implement innovation in pricing. This edited volume brings together 26 articles from academics, business practitioners and consultants. Authors are from the world’s largest companies, leading research-based universities and consulting companies specialized in pricing. This book is the only book dedicated to innovation in pricing and an essential read for business executives and pricing managers wishing to treat innovation in pricing as seriously as they treat product or business model innovation.
Pricing Of Products Services
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Author : Tridib Mazumbar
language : en
Publisher: World Scientific
Release Date : 2020-12-15
Pricing Of Products Services written by Tridib Mazumbar and has been published by World Scientific this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-12-15 with Business & Economics categories.
The price of a product or a service is a critical element of the marketing mix. Price influences product demand, and the firm's revenue and profits. Prices also signal product quality and value, customer self-image, and the seller's pricing practices. With appropriate balance of theory, applications, and analytics, this book provides business students and practitioners the tools to make profitable pricing decisions under a variety of real-life contexts — current and emerging.Theoretical foundations for pricing decisions come from microeconomics, psychology, and behavioral decision theories. Well-established economic principles, with available data and analytics, help firms customize prices based on customers' willingness to pay, quantity purchased, timing and urgency of purchase, and by bundling their products and services. Pricing and promotional strategies of firms are further informed by the consideration of consumer psychology as well as the decision rules that consumers employ in framing of and responding to prices.As a practical step-by-step guide for firms, the book presents a comprehensive framework for pricing decisions. The framework illustrates how firms' pricing decisions are shaped by customer valuation of the product or service, firm cost, and competition within the category. Additional considerations include: channel arrangements, legal and regulatory limits, public sentiments, and the overriding strategy for the firm. Short cases and numerical examples help illustrate how these factors can be incorporated in firm making decisions.In addition to offering the theoretical foundation and practical guidelines for pricing, there are several distinctive features of the book.Pedagogically, the book takes a quantitative approach to pricing decisions and places a special emphasis on the utilization of data and analytics. Nevertheless, sound intuition and judgments remain a prerequisite.
The Salience Of Price In The Perception And Evaluation Of Product Quality
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Author : Vithala Rajeswara Rao
language : en
Publisher:
Release Date : 1970
The Salience Of Price In The Perception And Evaluation Of Product Quality written by Vithala Rajeswara Rao and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1970 with Consumers categories.
To Buy Or Not To Buy Price Salience In An Online Shopping Field Experiment
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Author : Markus Dertwinkel-Kalt
language : en
Publisher:
Release Date : 2020
To Buy Or Not To Buy Price Salience In An Online Shopping Field Experiment written by Markus Dertwinkel-Kalt and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.