Moderating effects in consumers' perceptions of price unfairness

Abstract

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.

How consumers respond to missing a quantity discount with multiple price breaks

“…This revised internal reference price is used as a reference against which they evaluate the actual offering of the product, which in turn alters purchase probability. Our results are consistent with previous findings in reference price research that consumers do not perceive retailer‐supplied reference prices in isolation; perceptions of retailer‐supplied reference prices also depend on the context in which perception occurs (Monroe, ; Lichtenstein et al , ; Rondan‐Cataluña and Martin‐Ruiz, ; Yoon and Vargas, ; Kan et al , ; Huang and Yang, ).…”

“…There is much evidence showing that consumer evaluations of price offers are heavily influenced by the decision context and situational cues (Aggarwal and Vaidyanathan, ; Rondan‐Cataluña and Martin‐Ruiz, ; Yoon and Vargas, ; Huang and Yang, ). This suggests that the form in which the quantity discount is expressed may change the consumers' price estimates and subsequent consumption decisions.…”

Fairness management

“…Thus, if a transaction remains relatively similar, but the price is higher, buyers are likely to judge this as unfair (Rondan-Cataluña & Martin-Ruiz, 2011). In contrast, when the degree of similarity between transactions is low, the differences may explain the higher price, resulting in a judgment that it is less unfair or fair (Campbell, 1999).…”

“…In his mind, he expected the price to be the same as his comparison reference (his past experiences), thus developing unfairness perceptions. Rondan-Cataluña and Martin-Ruiz (2011) note that if a transaction remains relatively similar, but the price is higher, buyers will be likely to judge this as being unfair. This is well illustrated in the above case.…”

Public affairs in China: exploring the role of brand fairness perceptions in the case of Mercedes‐Benz

“…Research shows that when the degree of similarity between a comparative interactions is relatively high, buyers will expect that they are entitled to the same as their comparison reference (for instance past interaction or others buyers). Thus, if an interaction remains relatively similar, but the price is higher, buyers will be likely to judge this as being unfair (Rondan‐Cataluña & Martin‐Ruiz, ). In contrast, when the degree of similarity between interactions is low, the differences between may explain the higher price, resulting in a judgment that it is less unfair or as fair (Campbell, ).…”