Purpose -The purpose of this paper is to explore consumers' perceptions of price unfairness in services, what are its antecedents and when it is important for the consumer. Thus, the central question of this research is whether consumers care about how much profit the service company is making and whether there are significant differences to physical goods. Design/methodology/approach -Building on justice and equity theory, a causal model is developed -which analyses the main antecedents (seller profits vs customer value), moderators and consequences of perceptions of price unfairness. Structural equation modelling has been applied to test the proposed model. Findings -The lack of specific tools to measure perceptions of price fairness required the development of a multi-item scale to capture the complexity of the evaluation. This instrument has been tested for reliability and validity in a variety of settings, with excellent results, and can be appropriate when using the survey as a data collection method. Also, the authors have argued that there should be significant differences due to the nature of the product -service industries vs physical goods -as well as due to the number of available alternatives that the buyer has in the market. Originality/value -The validity of a new model is tested by means of an empirical research conducted in four different settings, two different services (automobile repair services and music concerts) and their related physical goods (automobiles and music CDs). A multi-item scale is also developed to capture the complexity of price fairness perceptions. Finally, significant differences between contexts, as well as due to the number of available alternatives present in the marketplace are examined.
This 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.
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