Voluntary pricing mechanisms for green product purchase: altruistic versus self-enhancing consideration

Voluntary pricing mechanisms, such as Pay-What-You-Want (PWYW), could be a better pricing strategy to substitute for cash discount promotions. They can effectively promote the sales of conventional goods and services, while being influenced by socio-psychological variables. However, there is no clarity on the relative assessment of the impact of pricing frames, such as PWYW and Mark-Off-Your-Own-Price (MOYOP), on the consumers’ purchase of green products, where the purchase consideration might vary as the environment protection (altruistic) consideration versus the self-interest (self-enhancing) consideration. Further, there remains ambiguity on when and why such pricing mechanisms will work. This study, through an experiment, examines the buyers’ varied responses for the PWYW price frame versus the MOYOP price frame versus the fixed price frame under the environment protection (altruistic) consideration versus the self-interest (self-enhancing) consideration. It shows that although buyers do not show any difference in the mean voluntary payment between PWYW versus MOYOP frames as such; they prefer PWYW price frame under the environment protection (altruistic) consideration and MOYOP price frame under the self-interest (self-enhancing) consideration. The results show that the perception of price fairness mediates the relationship between pricing mechanism and willingness to buy (WTB). Furthermore, this study finds that price consciousness impacts the indirect effect of pricing mechanisms on WTB via perceived price fairness. The present study is the first to examine and analyze different considerations when the buyers’ preference varied for the PWYW versus MOYOP pricing frames. This study has suggested the underlying role of the perception of price fairness and price consciousness in the participative pricing mechanism on purchase.     

The impact of buyer–seller relationships and reference prices on the effectiveness of the pay what you want pricing mechanism

Pay what you want (PWYW) is a new participative pricing mechanism that delegates the whole price determination to the buyer. Previous research on PWYW suggests that the final prices paid are not only affected by consumer characteristics but also by varying conditions, such as social distance within buyer–seller relationships and the provision of reference prices. Through an online survey and two field experiments, we test varying conditions of PWYW, such as social distance (buyer–seller relationship), provision of external reference price, product value, level of reputation, and duration of an application of PWYW. The results indicate that the provision of an external reference price is advantageous for the seller as the prices paid increase. The seller should also avoid offering products with high product value under PWYW conditions. Furthermore, increasing social distance may decrease the prices paid. Finally, a high level of reputation may be beneficial.     

Empathic cultural consumers: Pay what you want in the theater

Pay what you want (PWYW) is an increasingly popular sales strategy in which consumers voluntarily decide how much to pay for a product or service. PWYW has often been described as an exercise in the “empathy economy,” where consumers' payment choices might be seen as empowered expressions of their tastes and preferences, and sellers have a stronger incentive for empathizing with them. Beyond their economic interest, PWYW experiences also deserve significant attention in the social sciences given that they challenge several key assumptions of rational choice and neoclassical economic theory, as well as conventional consumer behavior and pricing theories. This paper analyzes three plays performed at the Beckett Theater in Barcelona using PWYW with very profitable outcomes. Our analysis shows that socio-psychological factors, such as payments attributed to others and satisfaction with the play, are the best predictors of customer payments.     

Do consumers use tipping to monitor service? Role of power and embarrassment

Tipping is regarded as a buyer monitoring mechanism. By rewarding good service (by giving larger tips), and punishing bad service (by giving smaller tips), consumers can contribute to enhance service quality. However, in this paper, we show that not all consumers use tipping to evaluate service. In three experiments, we demonstrate that based on the level of power consumers feel they have, they punish/reward service differently. Specifically, we show that low-power consumers are less likely than high-power consumers to punish poor service quality (Studies 1 and 2). We find that leaving small tips (in low service quality scenarios) makes low-power consumers anticipate embarrassment. These anticipations mediate the interaction effect of service quality and power on consumer tip size (Study 3).     

Every ending is a new beginning: Poignancy increases consumer preferences for self-made products

Retailers and brands such as IKEA, Home Depot, and Build-a-Bear encourage consumers to ‘make’ their products rather than be passive recipients. While a growing literature explores ‘why’ consumers purchase self-made products, it is less understood ‘how’ marketers can develop effective advertising and marketing communications to promote such products. Building on the functionalist framework of emotion, the present research explores the potential of a mixed emotional appeal – poignancy – that may be useful in enhancing consumer preferences for self-made products. Notably, this effect is mediated by a fresh start mindset and openness to learning. The effect is also attenuated among consumers with a low personal control. In addition to having substantive practical implications to marketers in developing effective communication strategies, this research offers a novel perspective on the effect of poignancy on consumer decision making.     

A guide to pay-what-you-wish pricing from the consumer’s viewpoint

As customer participation in business transactions increases, it is important to investigate how consumers approach financial transactions with firms in terms of selfishness and fairness. Pay-what-you-wish pricing models continue to attract managerial and academic interest as allowing customers to set prices provides an unorthodox setting in which to examine forces that drive buyer-seller interactions. This Executive Digest provides an overview of the current state of pay-what-you-wish (PWYW) pricing and the benefits it can provide to a firm.     

Power moderates the impact of desire for exclusivity on luxury experiential consumption

This research examines the effect of desire for exclusivity on evaluations of luxury experiences and proposes a boundary condition for the effect. The scarcity effect literature suggests that consumers prefer scarce products due to limited supply because they appeal to consumers’ desire for exclusive consumption. Building on this thesis, the current research argues that luxury experiences are intrinsically scarce enough to appeal to consumers’ desire for exclusivity: Consumers with a strong desire for exclusivity will evaluate luxury experiences more favorably than those with a weak desire for exclusivity. A pilot study confirms a positive correlation between consumers’ desire for exclusivity and attitudes toward luxury experiences. Study 1 demonstrates that consumers with a strong desire for exclusivity show more favorable attitudes toward luxury experiences than those with a weak desire for exclusivity. Further, Study 2 finds that consumers’ power state (powerful vs. powerless) moderates the effect of desire for exclusivity on their affinity for luxury experiences: Only when feeling powerful do consumers with a strong desire for exclusivity evaluate luxury experience more favorably than those with a weak desire for exclusivity. However, this is not the case when consumers feel powerless.     

Impacts of product type and representation type on the perception of justice and price fairness

Consumers make purchasing decisions every day. This paper investigates perceptions of justice and price unfairness, where the product (hedonic vs. utilitarian) is presented either in a more abstract (verbal) or a more concrete (photo) way in a context of discriminatory pricing—a widely-employed marketing practice. Two experimental studies were completed. Results show an interaction between product and representation types. When consumers pay more than others to purchase utilitarian products that are concretely represented, participants perceive more unfairness when compared to hedonic products. However, when consumers pay more than others to purchase utilitarian products abstractly represented, the perception of unfairness decreased compared to hedonic products. For consumers and practitioners, this study offers important contributions—it presents situations in which a discriminatory price can result in a different perception of injustice or price unfairness to informed consumers. Accordingly, implications of these findings for the literature, consumers, and managers are discussed.     

Everyday “low price” or everyday “value”? The interactive effects of framing and construal level on consumer purchase intentions

Academic literature uses the term “everyday low price” (EDLP) when referring to a pricing strategy that offers relatively stable, low prices across a wide assortment of product categories. However, in real-world situations, many brands and retailers opt to use a different term – “everyday value” (EDV). Do consumers differentially evaluate such framings of the same pricing strategy? The present research draws upon construal level theory and demonstrates – across two experimental studies – that EDV (vs. EDLP) framing is more effective among consumers with high (but not low) construal levels. This effect is mediated by perceived benefit such that consumers with high construal levels derive higher levels of perceived benefit when evaluating a product promoted with an EDV (vs. EDLP) framing. The findings of this research can be useful for marketers and retailers in promoting and framing the EDLP (or EDV) pricing strategies in their advertising and marketing communications.     

Pricing practices: A critical review of their effects on consumer perceptions and behaviour

With the present challenge to compete on price or product assortment, retailers and manufacturers are increasingly focusing on state-of-the-art pricing strategies which have their roots in behavioural economics and psychology. The current review is an empirical investigation on the relative effectiveness of various pricing practices on consumer perceptions and behaviour. Six pricing strategies were reviewed; drip pricing, reference pricing, the use of the word ‘free’, bait pricing, bundling and time-limited offers. The review shows that the former three have received a significant amount of attention and have a robust impact on consumer perceptions and behaviour. There is less research on the latter three; however, the available evidence does suggest that they, too, may be capable of influencing consumers’ choices. Finally, it is also clear that the effects of pricing practices can be moderated by a variety of factors. Overall, the current review indicates that sellers are able to influence perceptions and purchase decisions of consumers based on the manner in which prices are displayed. The implications of these findings for retailers, policy makers and researchers are discussed.     

Whether and to What Extent Consumers Demand Fair Pricing Behavior for Its Own Sake

This article contributes to scholarly understanding of the significance of procedural fairness in pricing contexts. It has been widely recognized that price fairness judgments concern both the outcome (fair price) and the procedure leading to the outcome (fair pricing). However, extant research has traditionally viewed procedural fairness as a means to outcome fairness. According to this instrumental view, procedural fairness is a component or antecedent of outcome fairness, but has no direct effects on consumers’ responses to prices. Building on the relational perspective on fairness, we develop and test a model of price procedural fairness as an end in itself. In three lab studies, we show that (1) when information regarding outcome (an unfavorable price difference) and procedure (the pricing practice underlying the price difference) is available simultaneously and unambiguously, procedural fairness has direct and stronger effects than outcome fairness on consumers’ responses and (2) procedural fairness mediates the effects of pricing practices on these responses. In all three studies, adding procedural fairness as a direct predictor of consumers’ responses increases the explanatory power of a model of price fairness significantly. Our model can explain peculiar real-world cases in which consumers reacted very strongly over relatively small price differences. The research findings point to the significance of the non-instrumental aspect of consumer’s demand for ethical (fair pricing) behavior and the need for companies to assess the fairness of their pricing practices from the consumer perspective.     

Feeling lucky: How framing the target product as a free gift enhances purchase intention

The present research investigates how consumers respond to alternate premium promotion framings that have equal value (e.g., “buy a flash drive and get a free earphone” vs. “buy an earphone and get a free flash drive”). We show that the counterintuitive framing of the target (vs. non-target) product as a free gift makes consumers feel lucky, which in turn increases their purchase intention for the product bundle. We further show the effects of two moderators—salience of targeting and promotion magnitude, such that the main effect is mitigated when the marketer’s targeting efforts are salient for consumers and when the target product is price discounted but not free. Four studies (i.e., a lab study, two online experiments, and a field experiment involving actual purchases of the promoted products) for a range of products and services across two countries provide converging evidence supporting the hypotheses. The findings contribute to the literatures on bundle framing effects, pricing, and luck research in marketing, and have practical implications on designing more effective promotions for both online and brick-and-mortar retailers.     

Creating Competitive Advantage for Calabrian-Made Products: The Influences of Culture and Price Perception

The purpose of this article is to investigate the influence of culture on consumers’ price perception of local products as well as the creation of competitive advantage for local firms. In particular, we analyze the locally produced goods of the Calabrian region in southern Italy. The research methodology is based on qualitative approach and quantitative approach. The results of the study offer important insights into consumers and firms. Since the firm has a better understanding about the role of culture and its effect on consumer perception, it will be able to adjust or improve its pricing policy and thus achieve consumer satisfaction and retention and gain competitive advantage to increasing sales. In this study we introduce specific cultural factors, such as the image and tradition of Magna Græcia culture. Although substantial research on the influence of cultural factors on consumer’s perception exists in the field of consumer research, this study further contributes to the literature by acting as a catalyst for future scientific enquiries in this important area.     

Effect of Normative and Affective Aspects on Willingness to Pay for Domestic Food Products—A Multiple Price List Experiment

There is limited knowledge about which factors underlie consumers’ preferences for domestic food products. We used a non-hypothetical multiple-price list experiment to investigate the effect of affective (product-related emotions) and normative (consumer ethnocentrism and subjective norms) factors on consumer willingness to pay for domestic food products. A total of 166 Croatian consumers were given a choice between domestic and foreign food products with different price premiums for domestic food. The results indicate that consumers are willing to pay a premium for both low- and high-involvement domestic food products. Consumer willingness to pay for domestic products is influenced by ethnocentrism, product-related emotions, and sociodemographic variables, but not by social norms.     

The self-creation effect: making a product supports its mindful consumption and the consumer’s well-being

Popular cultural movements such as Slow Food and the Maker Movement emphasize product self-creation―personally creating products, then consuming them, as a core value. We present the first research to examine how product self-creation affects the individual’s consumption experience of such products and their well-being. Seven field and lab studies provide evidence that when consumers self-create a product, they appreciate it to a greater degree, are likely to consume it more mindfully, and experience greater domain-specific and general well-being. The individual’s private self-consciousness strengthens the effect. Self-creating products offers consumers with a practical, versatile, and personal interest-driven way to transcend their traditional role, to consume more consciously and sustainably, while concurrently enhancing the enjoyment of their consumption experience.     

Powerlessness,variety-seeking,and the mediating role of need for autonomy

How does feeling powerless (vs. powerful) affect variety-seeking in retail contexts? Based on the notion that feeling powerless is associated with lower autonomy, and building on studies showing that having a wider choice set enhances autonomy, we predict—consistent with research on compensatory consumption—that low-power consumers (vs. those with high power) will exhibit greater variety-seeking. Findings across nine studies were consistent with this prediction. Further, while all nine studies provide evidence that low-power consumers seek greater variety, three studies (1A, 1B, and 1C) support the prediction that this effect is mediated by need for autonomy and not by any of eight other competing mechanisms, including other-orientation, need for uniqueness, and risk aversion. Studies 2 and 3 explore theoretically and managerially relevant ways, respectively, of reducing the tendency for low (vs. high) power consumers to seek greater variety, while study 4 provides external (real-world) validity for our prediction in retail (i.e., a restaurant) context. The theoretical and managerial implications of our research are discussed.     

新品牌规避消费者预期效应的产品营销路径探索

产品营销关乎企业生存与发展,面临众多大品牌的激烈竞争,对于一个新品牌来说,如何规避消费者对新品牌的不信任预期,使自己企业的产品受到更多消费者的青睐,是一个普遍存在的问题.因为知觉恒常性和知觉定势的存在,消费者在购买产品之前就会形成自己的预期,改变消费者的预期会对产品营销带来非常巨大的作用.改变消费者的预期可以通过消费者...     

When consumers penalize not so green products

To cash in on consumers’ willingness to pay higher prices for green products, several companies are promoting conventional products as green by highlighting a few green attributes. Through a theoretical lens, the authors investigate how consumers perceive such attempts. This research illustrates that not so green products make consumers sensitive to the monetary sacrifice associated with the purchase of such products. The current research shows that consumers have a negative attitude toward such products and they become concerned about the ethicality of the company when they encounter such products. Both implicit and explicit measures suggest that consumers notice the company's motive behind such practices which, in turn, impacts their price perceptions.     

Do green packages lead to misperceptions? The influence of package colors on consumers’ perceptions of brands with environmental claims

Consumers need accurate information about brands’ environmental impacts to guide their purchase decisions. Researchers have studied consumers’ perceptions of green products and marketers’ environmental claims. Policy makers provide guidelines to minimize deceptiveness of environmental claims. Yet, little attention has been paid to what contextual cues can influence consumers’ judgments of environmental claims and green products. Drawing on conceptual fluency theory, the current research proposes that a color that matches the content of a message makes the information easier to process, thereby increasing the appeal of the message. The authors demonstrate that using the color green on a product’s package can enhance consumers’ perceptions of the brand’s environmental impact. Ironically, this positive effect of green can also lead to consumers’ misperceptions of the brand’s environmental impact if green is used for brands that are not environmentally superior. Implications and suggestions for policy makers, marketers, and consumers are provided.