Jodie L. Ferguson, P. Ellen
Aug 19, 2013
Citations
3
Influential Citations
49
Citations
Journal
Journal of Product & Brand Management
Abstract
Purpose – This research aims to examine the effects of transparency in pricing (i.e. disclosure of a price increase and extent of explanation) on perceived price fairness when a firm increases price. Design/methodology/approach – US adult consumer panelists participated in two online experiments. Findings – Consumers perceive a firm's price increase as more fair when the firm discloses the increase itself as compared to an outside source disclosing it. For a small price increase, a limited explanation was perceived as more fair; for a larger price increase, a more detailed aligned cost explanation was perceived as more fair. Research limitations/implications – Firms who must raise prices may increase consumer perceptions of price fairness by disclosing the price increase and providing an appropriate explanation matched to the size of the increase. Originality/value – This research focuses on the effects of being more transparent about pricing in the case of a price increase. Perceived price fairness is af...