Using Experimental Survey Designs to Support Pricing Decisions

Abstract

Due to a changing marketing environment (more volatile, uncertain, complex and ambiguous framework, digitization) and the lack of a consistent pricing approach (challenge to harmonize neoclassical and behavioral elements), managers are increasingly questioning established ways to determine price levels and display price structures. Experimental testing represents a possibility to provide a decision support to pricing managers in the short run. The article presents three different projects, which quantitatively examine key elements of behavioral pricing: (1) the "Center-stage Effect" (electricity contract), (2) the impact of context on price perception (promotional campaigns for train tickets) and (3) offering of price guarantees as a means for improving the overall image as well as customer loyalty of the supplier (gas station). The results are partly unexpected as they contradict often-cited rules of thumb in behavioral pricing. Hence, it can be shown that experimental testing based on online surveys is a valuable and cost-efficient method to optimize price structures, price levels as well as price communication.

Willingness-to-pay experimental model for Stackelberg dual channel pricing decision

“…Similar to many real-world price experiments, the current study's price experiment was also conducted using a customer price experimental survey (Kr€ amer, 2016). Since the purpose of the study is to propose and implement the novel approach for evaluating the channel preferences of the customers and for determining the optimal pricing strategy, the current study conducted the experimental survey in a local company where college-aged consumers are their target customers.…”