Quantity Surcharges on Groceries

A quantity surcharge exists when the unit cost of a given brand is higher for a large package than for a small one. This paper examines some product and household characteristics that influence observed quantity surcharging practices. Results indicate that the propensity to buy a large package of a product is positively influenced by the extent of a household's usage of that product, procurement cost, and carrying capacity and is negatively influenced by the propensity to price search. A retailer's decision to levy a quantity surcharge is, in turn, influenced by demand for the product, the propensity to buy large packages, and to some extent the product's carrying cost.     

The Relationship Between Warranty and Product Reliability

Consumers tend to use warranty information when making judgments about the reliability of brands. This study examines the nature of the relationship between warranty terms and reliability for a sample of household appliances and electronic products. Overall, results show that warranty terms are poor predictors of brand reliability for the sample under study. However, results indicate that the relationship between warranty terms and brand reliability tends to improve with product age, market penetration, and the amount of variation in the reliability of brands.