Online shoppers' response to price comparison sites

Customers' perceptions of price differ in the online environment due to the presence of price comparison sites. The purpose of this study is to examine how price comparison sites affect price and value perceptions of online shoppers across different product types and price consciousness levels of online shoppers. The results of the study indicate that the price information provided by an online price comparison site influences online shoppers' perceptions of internal reference prices. However, the influence of a price comparison site on value perception differs according to product type. As evidenced by the significant interaction effect between product type and price comparison site information, the presence of price comparison sites increases both transaction and acquisition value perceptions for the non-look-and-feel product category (e.g., notebook computers), but not for the look-and-feel product category (e.g., jeans). Contrary to the expectation, online shoppers' price consciousness influences their price and value perceptions independently of price comparison site information.     

Competitive product lines with quality constraints

Competing firms often use product lines to screen different types of customers. Examples include, in general markets, product lines that screen the purchasing ability or preference for quality; in credit markets, product lines that screen the risk of the projects with different collateral; in insurance markets, product lines that screen the risk of accident with different coverage; and in labor markets, wage schedules that screen the employees’ abilities with different education levels. In some of these markets there can be some natural quality constraints: a maximum available quality in general markets, no negative collateral in credit markets; coverage not above 100% in insurance markets; minimum education level in labor markets. We present sufficient conditions for the existence of a pure strategies equilibrium (in such markets) under differentiation and a continuous distribution of customer types. We show that the equilibrium exists if there is a sufficiently high degree of differentiation among firms. Furthermore, we show that this equilibrium involves, under certain general conditions, pooling of customer types at the top and at the bottom of the distribution of customer types. The middle types may still be screened by the firms.

Are nutrition labels useful for the purchase of a familiar food? Evidence from Chinese consumers�� purchase of rice

Nutrition labeling has been accepted by Chinese consumers as an information source to learn about food quality and safety. This paper uses Chinese consumers’ rice purchase as an example to study how consumers use food nutrition labels to make purchase decision of a familiar food product. The goal is to understand how consumers seek information from the labels to make purchase when extensive experience with the food has been developed. Survey data from 400 random respondents in Beijing were analyzed using an empirical framework and a Mont Carlo integral econometrics model. We find that more than 50% of the consumers in Beijing have heard of food nutrition labels in general, 36.50% carefully use label information even if they are familiar with the food, and nearly 70% consider mandatory food nutrition labels as beneficial. Those who are more knowledgeable about rice nutrition labels are more likely to use the labels when purchasing rice, no matter how familiar they are with the product. Frequent users of nutrition labels are more likely to consider food mandatory nutrition labels as beneficial. This study suggests that consumers still use the label information to reassure the quality and safety of food despite a history of consumption.     

植入式广告在广播中的运用

植入式广告在影视和网络游戏中渐入佳境,而在广播中尚待开发,有关广播的植入式广告的理论探讨还是空白。本文针对植入式广告在广播中的运用进行了探讨,并提出实务过程中需要注意和解决的问题。     

Managing price expectations through product overlap

How should a retailer think about the decision to carry, price, and promote products that overlap with another store when such overlap is predicted to intensify price competition and drive down product prices? The existing research suggests that retailers should look to carry an ever-increasing percentage of unique or non-overlapping products [J. Marketing 61 (1997) 38; Marketing Sci. 19 (2000) 83], thereby eliminating the ability to compare prices across stores.We challenge this recommendation, arguing that overlapping products allow one type of retailer—the higher end retailer—to signal the fairness of its prices and foster a more favorable price image than might otherwise exist. In a laboratory study, we show that, for higher end stores, the existence of overlapping products can significantly increase perceptions of pricing fairness and subsequent store choice, even when those overlapping products are no cheaper in the focal store than in a competing store.     

Product differentiation under imperfect information: When does offering a lower quality pay?

In this paper, we extend the Varian (1980) model to examine endogenous quality differentiation by firms, with a particular emphasis on the interplay between the firms’ product quality decisions and the ensuing price rivalry. Specifically, we assume that the price-sensitive (or informed) consumers hold a lower valuation for product quality than the brand-loyal (or uninformed) consumers. It is shown that the firms will choose differentiated qualities for a broad class of consumer utility functions and production technologies. We obtain two results. First, the equilibrium quality choices are efficient as they are also the welfare-maximizing qualities chosen by a social planner. The equilibrium qualities are as if one firm serves only its loyal consumers and the other serves only the price-sensitive consumers, even though they each serve both types of consumers (at least for some fraction of time). Second, the firm choosing the lower quality makes greater profits and also prices more aggressively, in the sense that it maintains a lower maximum price and offers discounts more often. The lower-quality product is more profitable because it yields higher social surplus when consumed by the price-sensitive consumers.

Combining value and price to make purchase decisions in business markets

The authors investigate how purchasing managers combine information about product offerings' values and prices to make purchase decisions. The results of two field studies show that managers do not regard monetarily-equivalent changes in value and price to be the same. Using reference-dependent theory, the authors show that, rather than a single utility function, separate functions for value and price appear to underlie purchasing managers' decisions. The authors also address means of inducing managers to choose higher-valued, higher-priced product offerings.     

Principles involving marketing policies: An empirical assessment

We examined nine marketing textbooks, published since 1927, to see if they contained useful marketing principles. Four doctoral students found 566 normative statements about pricing, product, place, or promotion in these texts. None of these statements were supported by empirical evidence. Four raters agreed on only twenty of these 566 statements as providing meaningful principles. Twenty marketing professors rated whether the twenty meaningful principles were correct, supported by empirical evidence, useful, or surprising. None met all the criteria. Nine were judged to be nearly as correct when their wording was reversed.The authors thank the many people who commented on early drafts, including Eileen Bridges, Fred Collopy, Douglas Dalrymple, Alan Dubinsky, Andrew Ehrenberg, Jonathan Freeman, Raymond Hubbard, William Perreault, William Ross, Steven Schnaars, and Gerald Zaltman. Jennifer L. Armstrong, Gina Bloom, and Phan Lam provided editorial assistance.     

Effects of Consumers’ Efforts on Price and Promotion Fairness Perceptions

This research examines how consumers’ efforts as a nonmonetary sacrifice influence their price and promotion fairness perceptions in the context of price promotions. Multiple studies using different price promotion tactics demonstrate that consumers’ perceived level of effort to obtain a reduced price negatively influences their fairness perceptions when they deny the promoted price. Exploring the underlying mechanisms of this effect, we show that the amount of effort consumers exert to obtain a promoted price leads to their feeling of deservingness and entitlement. When the promoted price is denied, this feeling of entitlement is violated, causing unfairness perceptions to occur. The research demonstrates that, in addition to retailers’ actions such as price changes, consumers’ actions, in the form of their effort input, are also an important determinant of fairness perceptions.     

How do price range shoppers differ from reference price point shoppers?

Existing research demonstrates that reference price models can explain a significant amount of the variation in customers' price perceptions and purchase behaviors. This study extends the reference price literature by introducing the price range model, which proposes that price judgments are based on a comparison of the market price to the entire range of currently available prices. Our results demonstrate that the fit of a structural heterogeneity finite mixture model improves when the price range model is included along with internal and external reference price models and that the price range model explains a substantial proportion of customers' purchase histories in the toilet tissue category. Profile analysis indicates that internal reference price shoppers switch brands much less frequently than the other two segments and respond to feature promotions for their preferred brand(s). External reference price shoppers have an intermediate level of brand preference and respond significantly less than the other two segments to feature and display promotions. Price range shoppers have the lowest brand loyalty and respond most strongly to both feature and display promotions.     

Consumer responses to characteristics of price-matching guarantees: The moderating role of price consciousness

The present study develops and tests a conceptual model of consumer response to different types of price-matching characteristics (i.e., refund depth, length, and scope) across consumer segments with varying levels of price consciousness. A computer shopping simulation results show that a deep refund is interpreted as a signal of low prices by nonprice conscious consumers. However, price conscious consumers are found to associate deep refunds with increased prices, an unintended outcome for the retailer. The effects of price-matching characteristics on search and purchase behavior were also found to vary across more and less price conscious consumer segments.