Consumer perceptions of price fairness

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					Consumer perceptions of price fairness
?Fooled you know what it feels like? You sat in the plane, sitting next to you who
boasted that he bought half the tickets cheaper than you. Or, you wear in the discount
store to buy a new shirt, and your friend said when she found a discount department
store exactly the same shirt, but cheaper than 10 dollars of your shirt. Or, you can not
refund online reservation of hotel rooms, eventually found not cheap.

You may have experienced the other side of this trading relationship, say, to an
attractive price to grab a round-trip ticket to London or hotel sea view room, feeling
very satisfied.

Dynamic pricing and price discrimination

Wharton marketing professor Lisa From E · Bolton (Lisa E. Bolton)
and two colleagues - Peking University Guanghua School of Management marketing
professor, and Guo leaders of the University of Florida School of Business marketing
warrington Professor Joseph W · Alba (Joseph W. Alba), in a paper discussed the
pricing and fairness perceptions that the Chinese and American consumers with
different attitudes, or in some cases, a similar attitude. Researchers want to know,
such as when consumers find someone to buy a more affordable price the same
product, they would react. The paper was entitled "Culture and the market
perception of price fairness: China and the United States" (Culture and
Marketplace Effects on Perceived Price Fairness: China and the USA).

The researchers found that, overall, U.S. consumers can buy cheap goods will find a
fair, if not cheap, they find it unfair, no matter who their comparison shopping is a
friend or a stranger. On the other hand, Chinese consumers care about, and friends of
the comparisons. "For Chinese people, strangers to their no friends of great
influence, and Americans are all very sensitive to price discrimination."
Researchers wrote.

They also studied the relationship between customers and merchants - the first time,
shoppers and loyal customers compared to see whether that relationship affected the
price of their sense of fairness. U.S. consumers, who was the first time it seems
irrelevant to buy or loyal customers, get the low price that is fair, not fair pay more
than they are, no matter how the relationship between them and businesses. But the
Chinese people, if loyal customers paid higher prices, this will make them even more
uneasy. Chinese consumers "on the relationship between businesses and
customers are more sensitive nature."

Bolton believes that customers do need to understand marketing, how to determine
what is fair, there are several reasons. First, she said, "Fairness is the
driving force of repeat purchase", so the idea is to understand customer
business success. Moreover, the trend in the dynamic pricing equity may occur more
frequently now, "more companies try to different customers at different
prices to sell the same products", including prescription drugs, airline
tickets and books and other items. Internet allows companies to develop different
prices and rapid price changes more convenient, but the Internet also makes it easier
to find the consumer market inequality.

"Although the share price information between friends may be more
common, but the Internet makes consumers more opportunity to understand how
much a stranger to pay. For example, other consumers posted on eBay, travel
community website TripAdvisor and other similar sites on the price information.
"the researchers wrote. If customers find themselves pay more money than
others, so decided to go elsewhere to buy, then the manufacturers of dynamic pricing
strategy may backfire. Some consumers are more willing to believe that dynamic
pricing is price discrimination.

Bolton said: "The price on the price perception and how it affects a
person's sense of fair surprisingly small." Cross-cultural
information in particular. She said that from the perspective of the United States and
China is very interesting because one is a mature market, the other is "the
world's largest emerging market." In today's
globalized economy, American companies need to understand Chinese consumers
when making purchasing decisions are thinking, while Chinese companies also need
to read the minds of Americans.

Different pricing options

In this Guanghua - Wharton joint research projects of Chinese enterprises and the
market (Guanghua-Wharton Joint Research Initiative on Firms and Markets in China)
the first part, the researchers asked the Chinese, the United States between the
students read the following assumption of this multi-variable Scene: "You
buy a shirt. you find one you like in a store, and paid (29.95 USD / 39.95 U.S. dollars).
and then you see a (stranger / friend), you wear the same shirt (same brand, same
quality, same style). you know (the stranger / your friend) spent (39.95 / 29.95 U.S.
dollars) to buy this shirt. while at the same store bought. "in the Chinese
version , the price was set at 119 yuan and 159 yuan. Then the researchers were paid
to participate in the survey score table and asked them to evaluate, "You
pay a fair price?"

In another scene, the variables become loyal customers and first-time shoppers.
Previous research has investigated how it affects customer loyalty, the attitude of the
pricing, the results can be inconsistent. Of the paper wrote: "The basic
principles of relationship marketing is more profitable customers loyal, in part
because of its lower price sensitivity." But, "contrary to this
common sense, some studies show that long-term customers in the past may be more
price sensitive to the profit for the company but less. "

Bolton's study seems to support the latter view. Americans, whether new or
repeat customers, are considered unfair to pay high prices. "Chinese
consumers that if they are old customers still pay the high price is unfair."
Bolton said.

The researchers also investigated a series of pricing scenarios and change the
purchase time (same day or next day); product type (same or different) and location
(same store or different stores). U.S. and Chinese consumers believe that
"if a different store or different products, or date of purchase are very
different, so its not so expensive things to buy is not fair."

In addition, the researchers want to understand China, U.S. consumers are willing to
accept the stores and shops on the interpretation of price differences between, for
example, product quality, store profit strategies, and other operating costs (such as
rent and services), inventory shortage and customer base. China and the U.S.
consumers are most sympathetic to the arguments about quality, most can not accept
the interpretation of the margins.

The researchers said that China and the U.S. consumer prices are likely to be a fair
view of the impact of cultural differences. The researchers believe that more respect
American culture of individualism (each person or each shopper only for himself),
and collectivism, or "associated with social self" concept is the
guiding philosophy of Chinese culture. The researchers report that: "For
example, the average American and so treat a friend, colleague and boss, attributable
to the Chinese people more sensitive groups."

Bolton believes that these survey results show that U.S. consumers may not accept the
current dynamic pricing because they see that "fair is fair." She
believes that "in China may have more room for maneuver" to
set different price levels, as consumers and the "group of members of
the" comparative, that is, more friends than strangers, and from this point
of view look at a fair price.

Bolton pointed out that China has a increasing trend of the phenomenon, that people
form informal groups or clubs, to the business for better prices. This is called the buy,
buy a group of common interest (such as cars or electrical) of people through online
chat room, the sudden visit to a store or with the seller, buy from forming. This
concept is more than shopping can get a better price than individual purchase. Bolton
said that while Americans have joined a group discount available to some of the
experience (such as the American Automobile Association AAA, AARP or AARP
Alumni Association members), but the Chinese seem to be to accept the fact that they
pay The price may be affected by their respective organizations.
Then the business's future pricing strategy will happen? Obviously, only
two or three times a year discount store sales, customers pay full price most of the
time is gone. However, today's customer is ready to face even more
difficult to predict the dynamic pricing of the world? "With the technology
and the popularity of the Internet, marketers increasingly concerned about the
dynamic pricing or price discrimination against the individual's
potential." Researchers said. But they believe that these results reflect, at
least in the current "fear of the fair price may limit consumer acceptance of
such initiatives, in different cultures the extent of such restrictions may be

They concluded that: "Of course, there are exceptions to that rule (such as
the elderly and children for special pricing), the pricing mechanism on the results of
traditional practices and social norms also play a role, over time, dynamic Pricing
may be better understood and accepted. "

(This article by University of Pennsylvania Wharton School of Knowledge, published
online license)
Source: Beijing habitat Valley
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