تقسیم بندی بازار بر اساس اثر دوگانه و بهینه سازی قیمت
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|5811||2013||9 صفحه PDF||سفارش دهید||محاسبه نشده|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Business Research, Volume 66, Issue 4, April 2013, Pages 480–488
Price has two distinct effects on consumers' evaluations of products, namely sacrifice and informational effects. No pricing models exist that explicitly account for this dual effect of price. This article combines insights from behavioral research on the dual effect of price with a model of market segmentation and price discrimination among segments. The authors propose a method for market segmentation that is based on the degree to which consumers attend to the informational and sacrifice effects of price and combine the segment-level parameter estimates with a model of price optimization. An empirical study using seven different product categories provides evidence in support of the robustness and relevance of the proposed approach. The results show that the dual effect-based approach captures consumers' price preference structures more precisely than a segmentation on the basis of the commonly measured total effect of price and thereby enables sellers to increase their profits.
Setting prices for products represents one of the most critical decisions for both manufacturers and retailers (Gijsbrechts, 1993). In order to set prices optimally, marketers must account for consumers' (heterogeneous) price reactions on the basis of economic and behavioral considerations, product costs, and—if applicable—competition (Estelami and Maxwell, 2003 and Levy et al., 2004). Therefore, developing an appropriate pricing strategy is both crucial and highly complex and has prompted an extensive stream of research on pricing principles, strategies, and tactics. To increase profitability, marketers typically engage in some form of price discrimination, that is, they attempt to exploit consumer heterogeneity through differential pricing strategies (Gijsbrechts, 1993). Most pricing models take as an essential input consumer response to changes in price. Two distinct effects, discussed as the “dual role of price” by previous research (e.g., Erickson and Johansson, 1985, Lichtenstein et al., 1993 and Voelckner, 2008), drive this price response, namely, sacrifice and informational effects of price. The sacrifice effect, which stems from classic economic theory, refers to a consumer's evaluation of the amount of money that he or she must sacrifice to satisfy his or her consumption needs. In this respect, price generates disutility, and higher prices decrease consumer surplus because consumers must pay more for the product. Previous research suggests two potential sources of the sacrifice component of price: allocative effects and transaction utility. The former indicates the basic way of viewing price as a monetary constraint and varies, among others, with consumers' price consciousness and price mavenism (e.g., Erickson and Johansson, 1985 and Lichtenstein et al., 1993). The latter represents the incremental utility associated with a “good deal” which varies, among others, with consumers' value consciousness as well as sales and coupon proneness (Lichtenstein et al., 1993). Contrary to classic economic theory, however, consumers do not always buy the lowest priced product in a category, even when the products are otherwise similar. One behavioral explanation, supported by empirical evidence, is that consumers perceive prices as quality cues and assume a positive association between price and quality. Thus, higher prices may indicate higher quality and thereby increase consumers' perceived utility, which in turn results in a positive price elasticity of demand (Rao & Monroe, 1989). Other potential, but usually less significant sources of the informational effect of price relate to feelings of prestige and status higher prices signal to other people and egocentric desires to make oneself a present (e.g., Lichtenstein et al., 1993 and Voelckner, 2008). Despite strong empirical evidence that both sacrifice and informational effects drive consumer response to changes in price, pricing literature has not discussed the implications of this dual effect of price for price discrimination and optimization decisions (Dixit et al., 2008, Monroe, 2003, Nagle and Hogan, 2006 and Phlips, 1989). This gap in the literature may be because no (empirical) price optimization models exist that explicitly account for the dual effect of price (i.e., the sacrifice and informational effects of price). This paper attempts to fill this important research gap by combining insights from behavioral research on the dual effect of price with a model of price optimization among consumer segments. The focus of this article, thus, is not on developing a new method for measuring the different effects of price; rather this paper uses the dual role of price to identify market segments and optimizes prices on the basis of these segments. Specifically, this paper makes two key contributions. First, the paper introduces a new method for market segmentation that is based on the degree to which consumers attend to the informational and sacrifice effects of price (i.e., dual effect-based segmentation) and provides empirical evidence that the dual effect-based segmentation approach captures consumers' price preference structures more precisely than a segmentation on the basis of the commonly measured total effect of price. Second, the paper explores whether and how companies can exploit the informational effect of price to increase their profits by combining the proposed dual effect-based segmentation approach with a model of price optimization among consumer segments in which the seller offers a menu of product versions and consumers self-select from this menu. Because the relationship between price and perceived quality largely depends on disaggregated behavior and beliefs, it seems plausible that price discrimination policies that consider consumer heterogeneity in terms of the informational effect of price could lead to different profit implications than commonly applied procedures that do not account for this aspect. Profitability simulations illustrate the profit implications of the dual effect-based segmentation and price optimization approach. In addition, the paper identifies market segments on the basis of the commonly measured total effect of price (i.e., total effect-based segmentation), determines the menu of product alternatives that maximizes the seller's profit, and compares the results. The study's findings show that the dual effect-based approach yields more clearly separated, robust segments than a segmentation approach on the basis of the total effect of price and thereby enables sellers to increase their profits.
نتیجه گیری انگلیسی
This paper proposes a new method for market segmentation that is based on the degree to which consumers attend to the informational and sacrifice effects of price and combines the segment-level parameter estimates with a model of price optimization and discrimination. An empirical study using seven product categories tests the validity and profit effects of the proposed dual effect-based segmentation and optimal price discrimination approach. The results indicate the feasibility and applicability of this approach for a broad range of product categories, including fast moving consumer goods, durables, and services. Specifically, the results show that the proposed dual effect-based approach captures consumers' price preference structures more precisely than a segmentation on the basis of the commonly measured total effect of price and demonstrate how marketers can exploit the informational effect of price to increase their profits by combining the proposed dual effect-based segmentation approach with a model of optimal price discrimination among consumer segments. This paper therefore has several important implications for managers and researchers. The most apparent implication for managers is that the informational effect of price matters for market segmentation and pricing decisions. The study's results demonstrate that the dual effect of price has strong implications for consumer segmentation based on survey data; companies can attain different segmentation results compared to a standard segmentation based on the total effect of price. The proposed dual effect-based segmentation tends to be more stable with respect to consumers' reactions to price, because the two effects of price operate as separate segmentation criteria and are not confounded. In most product categories, companies can substantially increase profits by accounting for the dual effect of price. Therefore, managers should consider this effect in their decision making; the risk of improperly omitting it can be severe. This paper provides managers with an easy-to-implement approach for testing and accounting for the dual effect of price in market segmentation and price optimization. Finally, the analyses reveal that in general, the informational effect of price operates only within a certain price range, because consumers doubt the price–quality relationship outside that range. Managers should take this boundary into account when trying to exploit the informational effect of price in their pricing decisions. The proposed dual effect-based segmentation approach provides information about this price range and accounts for its effect in the price optimization step (i.e., in deriving the optimal menu of product alternatives). Moreover, the proposed methodology enables researchers to analyze and explain consumer price reactions in different product categories and consumer segments. A more precise segmentation of consumers according to their price reactions can reduce errors resulting from false classifications and therefore increase the validity of models that explain consumer choice behavior. Also, the varying magnitude of the informational effect of price in different segments and price ranges suggests deeper insights into the prevalence of positive price elasticities, for which the informational effect dominates (Tellis, 1988). The broad range of our empirical studies, which encompass various product categories, provides a first step toward an empirical generalization of the dual effects of price and their magnitudes in different markets and segments. However, this study contains several limitations that restrict some of the implications of our results but also provide interesting opportunities for further research. First, this study does not explicitly analyze competition in the choice scenarios (though the conjoint setting implicitly captures the effects of competing products and brands with the conjoint utility of the no-purchase option). However, additional research could extend our approach to include competing products and brands explicitly. Second, this study excludes possible cost increases that may result from increasing product line length (i.e. the costs of versioning). These costs can be negligible in some product categories (e.g., online and information services) but substantial in others (e.g., automobiles) and can be analyzed in further research. Third, the analyses reveal that the informational effect of price only operates within a certain price range. Researchers may develop approaches to determine the exact price range in which the informational effect operates—and thus in which managers can exploit it. Fourth, the conjoint scenarios may have some limitations. The gift scenario may also induce some hedonic value perceptions triggered by the supermarket's anniversary promotion. However, the informational effect of price in a broader sense comprises different dimensions, namely the quality of the physical product attributes, feelings of prestige and status which higher prices signal to other people and egocentric desires to make oneself a present (e.g., Lichtenstein et al., 1993, Rao and Monroe, 1989 and Voelckner, 2008). The gift scenario (consumer report scenario) measures the aggregate informational (sacrifice) effect and, thus, implicitly accounts for the underlying dimensions. Further research may develop conjoint approaches to explicitly measure these different underlying dimensions. In addition, the consumer report scenario depends on the trustworthiness of the consumer report company. However, since this study used a well-known and highly regarded company with a history of over 45 years in Germany, respondents likely felt very confident regarding the quality information. Further interesting areas for research include experimental tests of the magnitude of the two opposing price effects in the laboratory and the field, with potential variations in price levels, product categories, and brand and advertising effects.