2021
DOI: 10.1108/jpbm-10-2020-3157
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Compromise pricing in luxury

Abstract: Purpose Going beyond odd and even prices, this paper aims to explore the rationale behind the widespread practice of setting prices ending in “50” or “80” in the luxury industry. The authors argue that when they set such prices, managers agree to reduce their profit margin to limit the anticipated guilt luxury consumers associate with luxury shopping while also protecting their brand luxury. The authors label these prices compromise prices and formally define compromise pricing as the practice of choosing a pr… Show more

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Cited by 1 publication
(1 citation statement)
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References 38 publications
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“…Such consumers account for about 10% -15% of the total population [5]. In addition, Kowalczyk and Mitchell argued that Consumers tend to buy goods to meet their higherlevel dual psychological needs of combining practicality and ostentation [6]. This shows that luxury products belong to the normal goods and consumers tend to purchase luxury goods to satisfy their own needs.…”
Section: Introductionmentioning
confidence: 99%
“…Such consumers account for about 10% -15% of the total population [5]. In addition, Kowalczyk and Mitchell argued that Consumers tend to buy goods to meet their higherlevel dual psychological needs of combining practicality and ostentation [6]. This shows that luxury products belong to the normal goods and consumers tend to purchase luxury goods to satisfy their own needs.…”
Section: Introductionmentioning
confidence: 99%