Synthesis of ABAB Pcs

So far, this research work has presented some interesting findings, at every stage of this research process. However, these results have some managerial implications, as described in the next sections.

1.6.1 The Perceptual Process

As a marketing practitioner, the author has experience with the interchangeable use of willingness to pay, purchase intent, and purchase behaviour, in marketing. For example, it seems to be an assumption that a higher willingness to pay will result in a higher purchase behaviour while ignoring other steps in the purchasing process. For example, a positive price perception might lead to a better willingness to pay. Moreover, there might be factors in the purchasing process that mean despite a higher willingness to pay; there might not be higher purchase behaviour (i.e. an actual sale).

So, the framework on the formation of price perception (see Figure 1-1) suggests that there are different steps in the purchasing process that marketers should be aware. Moreover, the same framework shows factors (see Figure 1-7), that influence each step in the process. Consequently, marketers should look at these factors to improve steps such as purchase behaviour.

Moreover, the framework on the formation of price perception suggests that price perception is a cyclical process, that regenerates it after a purchase behaviour (occurs). This suggestion is interesting since, for example, when a customer purchases a product at a heavy discount, the discounted price will be the next reference price that will be used on a new purchase occasion,

1.6.2 Reference Prices and Retail Pricing

The notion that reference prices affect the formation of price perception is also interesting for marketing. For example, consumers that are exposed to low prices in the form of promotions, coupons, sale, and discounting, are expected to search for low prices in the store (Burman and Biswas, 2004). Moreover, the consumer can be segmented in marketing by their recollection of reference prices (Erdem et al., 2001). There is evidence that consumers can be segmented by their reaction to price endings (Harris and Bray, 2007).

Moreover, consumers expect to pay different prices depending on the store format (Tang et al., 2001). Furthermore, ethnicity plays a role in the store format and the perceived price (Mulhern et al., 1998). So, this is important for marketing as it allows us to make precise changes in how prices are presented to the consumer (i.e. price endings), and the store format.

This contribution is important for researchers in areas such as retail marketing, virtual stores, and neuromarketing.

1.6.3 Hypothetical versus Real Prices

Some research studies in the literature use hypothetical prices when studying pricing. When using hypothetical prices in a research study, the respondent might be reporting a willingness to pay, since the respondent is not actually buying the product. So, marketing practitioners should be aware of what is reported. In other words, there is a question about whether purchase intentions predict purchase behaviour (Chandon et al., 2005).

On the contrary, by using real prices, and incentives, as presented in the systematic review, marketers can have a glimpse of an actual purchasing process. Some current researchers use real prices, in both simulated and actual purchasing scenarios. For example, the work on eye-tracking and pricing allows us to understand what consumers are looking at when they are purchasing a product. An example of an application of eye-tracking in pricing is presented by Meißner and Decker (2010). Also, there are applications of integrating emotions in the analysis of retail prices. For example, Zielke (2011) studied this approach.

Moreover, the author has experience of conducting eye-tracking studies and pricing, in a practitioner’s setting.

1.6.4 Multi-ethnic Pricing

So far, in marketing, there are two areas that consider cultural diversity for the development of marketing programmes; multi-cultural marketing (Jamal, 2003), and multi-ethnic marketing (Cui, 1997)¹⁴. In the United States, multi-cultural marketing focuses on adapting the marketing mix to a particular set of consumers, such as Hispanics (Campbell, 2013) or American-Jewish (Podoshen, 2006). On the other hand, multi-ethnic pricing seems to be concerned not just with Hispanics (Peñaloza and Gilly, 1999), but also with other ethnic groups, such as African-Americans (Green, 1995).

However, this research brings up the suggestion of the existence of a price construct, namely, multi-ethnic pricing, where ethnic groups perceive prices differently, and therefore marketers adapt their marketing strategies accordingly. Nonetheless, this research is not suggesting in any sense to promote price discrimination among ethnic groups, but rather to understand that there are differences in how ethnic groups perceive prices. Yet, this research is also distancing itself from practices such as redlining, where price is treated differently based on ethnic zones (D'Rozario and Williams, 2005). An example of a pricing practice that uses the learning on ethnic groups and prices presented in this research is the use of coupons. Accordingly, Hispanics and Caucasians are more prone to coupons whereas African-Americans seem to prefer upfront discounts. So, deciding whether to offer coupons (that is a form of discounts) or upfront discounts might be an example of an application of multi-ethnic pricing.

14 Additionally, there are marketing strategies aimed at cultural groups such as the LGBT community, senior citizens, war veterans, millennials and more. But these groups were not considered in this study although they do present an interesting opportunity for further research.

1.6.5 Contextual Pricing

The notion that the price perception of consumers might be affected by contextual variables, such as time, location, store format, reference group, and more, is supported by this research. As such, there is a wealth of research and practice in the field of mobile marketing. Moreover, this notion seems to be extended with the advent of the Internet of Things (IOT), where consumers are connected via smartwatches and wired-clothes. Thus, there is an opportunity for practitioners to understand that location is a factor that might affect the perception of prices. Accordingly, a consumer browsing for clothes on a smartphone might have a different price sensitivity towards clothes than a consumer who is browsing for clothes while commuting on the train.

The increasing use of mobile technologies for shopping might bring up the need for the development of contextual price strategies. So far, this research summarises how different contextual factors influence price perception, and this might help in the development of a contextual price strategy.

1.6.6 Bridging Online and Offline Pricing

The author is particularly interested in the topic of dynamic prices in the retail environment (see section 1.2). Accordingly, there is a wealth of work on the subject of dynamic prices using mobile and Internet technologies. However, it seems like the brick-and-mortar retail might be lagging behind. From the author’s perspective, the brick-and-mortar retail should integrate with online retail, and provide an omnichannel experience, where the shopping experience is transparent among multiple channels.

The increased use of retail beacons that allow for tracking of the customer experience in the store¹⁵, memory mirrors that allow consumers to try on different outfits in the store, but with an online shopping experience, and virtual stores, permits the integration of the offline and online retail experience. The

15 To prevent privacy issues, the author’s proposal on the use of retail beacons in the store requires the customer’s consent. For example, by using store apps that are downloaded by the consumer.

literature shows differences in the perception of prices in online versus offline environments (Dixit et al., 2014). Thus this research offers a contribution to management by suggesting how price perception varies in different environments or contexts (see Figure 1-1), and this can be incorporated in pricing models that cross offline and online shopping environments.

So far, this research has presented some findings and managerial implications.

However, the next section will introduce limitations and directions for further studies.