An Examination of Construal Effects on Price Perceptions in the Advance Selling of Experience Services

Abstract

Service research in the advance selling of experience services is limited in regard to how individual and situational differences influence price information processing. Applying construal-level theory in the context of advance selling of tickets for experience services, this research demonstrates that who (near vs. far social distance), when (near vs. far temporal distance), and where (spatial distance) influence price sensitivity and perceived value of the experience service. Study 1 finds that consumers are more price sensitive when they consider the advance purchase of events taking place further in the future, unless they are experienced, as Study 2 finds. Across both studies, buyers perceive greater value when the time and location of the event are psychologically near. Compared to when social distance is near (self-reference), consumers construe other average buyers in the market to be relatively more price sensitive and to perceive relatively higher value for experience services. Since an important factor at work in the minds of buyers is other buyers, the results imply that service providers should frame offers in reference more to others than the self for experiences. The effects of time and distance suggest managers should carefully geo-target offers customized to when and where customers are when buying tickets. As experienced buyers have learned to be price sensitive for tickets, managers should identify these individuals to provide relevant value-added offers.

Have We Got a Deal for You: Do You Want the Good News or Bad News First?

“…Tickets and reservations are sold via intermediaries (viz., Ticketmaster; Hotwire), primary sellers (viz., Dallas Mavericks; Hilton Hotels) and resellers (individual buyers or brokers) for many experiences. Information asymmetry is relatively high given supply and demand fluctuations such that buyers may miscalculate the value of changes in prices (Wakefield and Wakefield 2018). Thus, commercial enterprises must consider how value propositions are perceived given the fact sellers have more information on inventory supply and demand fluctuations than do consumers-and consumers are apt to be wary of the disadvantage.…”

“…Research in marketing has not examined how consumers process good news and bad news together, though some work has examined updating expectations in separate sequences of news events (c.f., Guiyang Xiong & Bharadwaj Sundar, 2013; Kopalle & Lehmann, 1995). Research on pricing and promotions for services at the consumer level is scant, let alone for experience services (Wakefield and Wakefield 2018). Theoretically, we contribute to this literature by presenting a promotion framework for ticketed services in the context of advance selling of services (Shugan & Xie, 2000, 2004).…”

Implementation of Construal Level Theory (CLT) on Indonesian Customers toward Domestic as well as Overseas Online Shopping

“…In accordance with CLT, what is more easily accessed will be perceived more positively. This is supported by Wakefield & Wakefield (2018) that perceived value of an experience increases as the time and spatial to consume draws nearer. Therefore we propose the following hypothesis: H2(a, b) Lower psychological distance has a positive effect on perceived value for domestic online shop customers (a) and overseas online shop customers (b) Psychological distance affects the mental construal of events, in turn guiding people's choices, evaluations, and behaviors.…”

“…The purpose of CLT is to explain how psychological distance influences on representation, prediction, evaluation, and behavior of an object or event (Trope et al, 2007). Psychological distance is defined as the perceived distance from the experience of an individual of an occurrence (an experience that includes interactions and feelings) (Trope and Liberman, 2003). In order to achieve success in an online shop, online shop needs to build convenience and speed (temporal), bring social participation in purchases (social), and mobility to be purchased anywhere (spatial) (Schiff, 2016).…”