Partitioned pricing, price fairness perceptions, and the moderating effects of brand relationships in SME business markets

Ferguson, Jodie L.; Brown, Brian P.; Johnston, Wesley J.

doi:10.1016/j.jbusres.2016.11.001

Cited by 38 publications

(29 citation statements)

References 81 publications

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“…Furthermore, previous studies have explored the boundary of partitioned pricing vs all-inclusive pricing effects and the factors that might affect the pricing effect, such as temporal distance, regulatory focus, brand relationship, the characteristics of the surcharge and observability of the total price (e.g. Abraham and Hamilton, 2018; Choi et al , 2019; Ferguson et al , 2017; Kim, 2006; Lee et al , 2014; Sheng et al , 2007). However, few studies have explored whether the effectiveness of partitioned vs all-inclusive pricing differs with consumer personality (Lee et al , 2014).…”

Section: Introductionmentioning

confidence: 99%

The effects of pricing strategy on upgrade intentions

Liu

Chou

2021

MIP

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PurposeTaking a mental accounting theory perspective, this study explores how pricing strategy (all-inclusive vs partitioned) influences consumers' perceived residual value of a product and their subsequent intentions to upgrade to a newer model.Design/methodology/approachA pilot study and two formal experiments were conducted to test the hypotheses.FindingsA partitioned (vs all-inclusive) price causes consumers to later recall a lower total cost and perceive lower residual value for the existing product, thereby increasing upgrade intentions. This finding holds for both utilitarian and hedonic products. Perceived residual value mediates the impact of the pricing strategy on upgrade intentions. The pricing strategy effect is stronger for state-oriented individuals than for action-oriented individuals.Originality/valueThis study extends understanding of the impact of pricing strategies from consumers' short-term immediate demand to long-term upgrade intentions. It also identifies a previously uninvestigated moderator (action-state orientation), clarifying the boundary conditions of pricing strategy effects. The study's conceptual framework links pricing strategy, sunk costs, perceived residual value and upgrade intentions, providing rich insights and potential research paths. These findings further enhance understanding of upgrade intentions.

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Section: Introductionmentioning

confidence: 99%

The effects of pricing strategy on upgrade intentions

Liu

Chou

2021

MIP

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“…Recruiting study participants through reputed research organizations has been validated in previous research, especially when the focus of the study is on managers (Ferguson et al, 2017;Nguyen et al, 2017). In addition, screening and qualifying questions were used in the survey to maintain the relevance of the sample (Anaza and Nowlin, 2017;Ferguson et al, 2017).…”

Section: Methodsmentioning

confidence: 99%

Exploring patterns of organizational capability alignment: a contingency approach

Srivastava

D′Souza

2019

MRR

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Purpose The purpose of the study is to investigate whether the alignment between organizational capabilities is idiosyncratic to an organization or a predictable pattern of alignments can be identified across organizations. Design/methodology/approach Survey design is used to collect data from upper- and mid-level managers of organizations operating in the software industry. A total of 219 responses are used to test the study hypotheses. Partial least squares structural equation modeling and regression analysis are used for data analysis and hypotheses testing. Findings Results suggest that the alignment between strategic thinking and absorptive capacity is different for organizations with a prospector-type strategic orientation compared to organizations with other types (defenders and analyzers) of strategic orientations. The study also finds that the pattern of alignment holds for each dimension of absorptive capacity. Originality/value There is limited research on the alignment between the three types of organizational capabilities (metaphysical, dynamic and ordinary). This may have transcended from arguments that if organizational capabilities are truly idiosyncratic, they should not be expected to follow a predictable pattern of alignments across organizations. To the best of the authors’ knowledge, this study is the first to empirically investigate and provide evidence that the alignment between organizational capabilities is contingent on the strategic orientation of the organizations. The findings offer hope for the development of a generalizable theory of organizational capability alignment in organizations.

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“…Some articles have also investigated framing effects. For example, Ferguson, Brown, and Johnston (2017) showedamong other things-that price partitioning can influence the fairness perception of professional purchasers in small and medium-sized firms. Moreover, research exists on the status quo bias in pricing.…”

Section: Behavioral and Psychological Aspects Of Pricingmentioning

confidence: 99%

“…The scenario asked the respondents to imagine that they are in another city and need to rent hotel conference space, including several additional services, in order to host a business meeting for ten people. This particular scenario has been successfully used before by Ferguson, Brown, and Johnston (2017). Paper V used a single factor, between subject design (partitioned price versus combined price).…”

Section: Paper V: the Effect Of Price Partitioning On Customer Perceimentioning

confidence: 99%

“…P Estelami and Nejad (2017), P Forman and Hunt (2013), S Terho et al (2017) Demand …investigating actual customers; (i.e., not how managers think customers are, how they behave, and think). P Ferguson, Brown, and Johnston (2017), P Backhaus, Koch, and Stingel (2011) Both …contemplating the full picture of supplier and buyer interactions (e.g., how do salespeople and purchasing agents negotiate about value? ).…”

Section: Sampling Framementioning

confidence: 99%

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Micro-foundations of value-based pricing and selling

Kienzler¹

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Enabling customer value creation is central to marketing theory and practice. Yet, doing so does not ensure that supplier firms profit from it. Value-based pricing and selling come with the prospect of translating customer value creation into greater profits for suppliers. However, despite sustained interest, only a limited number of firms emphasize value-based pricing and selling. Existing research has highlighted organizational challenges as potential reasons. Unfortunately, this focus on organizational challenges obscures the role of individuals within organizations (i.e., its micro-foundations), such as the fact that managers and salespeople determine and realize prices. The purpose of this thesis is thus to describe and analyze the micro-foundations of value-based pricing and selling in business markets. The thesis' conceptual framework introduces bounded rationality and heterogeneity-two overlooked forces-to investigate the affective, cognitive, and motivational micro-foundations of value-based pricing and selling. The thesis' empirical foundation consists of five papers that investigate the microfoundations suggested by the framework. The findings indicate that research would benefit from a wider variety of research approaches. Currently, insights into micro-foundations are lacking, in part due to the focus on research designs and theories aimed at the organizational level; experimental designs and theories from psychology would allow amendments to prior research. Furthermore, individual rationality and individual differences play a role. In this regard, managers' cognitive biases impact upon the extent to which firms focus on value-based pricing. Moreover, price presentation impacts managers' value perception and purchase intention. The findings also suggest that managers' personalities and salespeople's experience and learning orientation are important individual differences affecting the emphasis on valuebased pricing and selling. Consequently, affective, cognitive and motivational micro-foundations-arising due to bounded rationality and heterogeneityexplain some of the challenges associated with value-based pricing and selling. This thesis contributes with insights into several micro-foundations affecting value-based pricing and selling. In so doing, the thesis belongs to a growing stream of research that is shifting the focus from organizational processes to the individual foundations of value-based pricing and selling. The thesis also provides suggestions on how managers can use micro-foundations to the advantage of their firms.

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Partitioned pricing, price fairness perceptions, and the moderating effects of brand relationships in SME business markets

Cited by 38 publications

References 81 publications

The effects of pricing strategy on upgrade intentions

The effects of pricing strategy on upgrade intentions

Exploring patterns of organizational capability alignment: a contingency approach

Micro-foundations of value-based pricing and selling

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