Doctor of Philosophy, The Ohio State University, 2023, Business Administration
Pricing is one of the most important tools in a marketing manager's toolbox (Kotler and Armstrong 2010), and at least 80% of consumer choices are influenced by price (Forbes 2017, June 14). Unsurprisingly, extant research studied the effectiveness of many pricing strategies, establishing the effectiveness of strategies like just-below prices (Manning & Sprott, 2009; Thomas & Morwitz, 2005), range pricing (Biswas and Burton 1993; Fan, Li, and Jiang 2018; Haws and Bearden 2006) and price promotions (Foubert and Gijsbrechts 2007; Gupta 1988; Kahn and Louie 1990; Van Heerde, Gupta, and Wittink 2003), and examining how such strategies influence consumer's attitude toward prices and brand, price perceptions, and purchase intention.
Building on this extant literature, I examine the nuances of these effects, moderators, and the unique consequences that have not been previously studied. Together, three chapters in this essay contribute to our understanding of how different pricing strategies influence consumer psychology of price perceptions and choices.
The first chapter examines the effectiveness of just-below pricing in a context where consumers consider a within-brand upgrade decision, where the company's goal is to encourage upgrades. The first chapter demonstrates that when a base product is priced at or just-above a threshold (e.g., $20.00), consumers are more likely to upgrade and spend more money than when a base product is priced just-below a threshold (e.g., $19.99) because they perceive the upgrade option as less expensive, and they place less weight on price. Further this effect is mitigated under sequential choice and when an upgrade price crosses an upper threshold.
The second chapter examines the effectiveness of the increasingly popular strategy of range pricing, where retailers present prices as a range (e.g., $19.99 – $29.99) rather than a specific price point (e.g., $19.99 or $29.99). The second chapter demonstrates that consumers have optimistic pric (open full item for complete abstract)
Committee: Joseph Goodman (Committee Co-Chair); Selin Malkoc (Committee Co-Chair); Grant Donnelly (Committee Member); Priya Raghubir (Committee Member); Rebecca Reczek (Committee Member)
Subjects: Business Administration; Marketing