| Title: | Research Note—Does Demand Fall When Customers Perceive That Prices Are Unfair? The Case of Premium Pricing for Large Sizes; |
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| Authors and Corporations: | , |
| In: | Marketing Science, 27, 2008, 3, p. 492-500 |
| published: |
Institute for Operations Research and the Management Sciences (INFORMS)
|
| Media Type: | Article, E-Article |
| Physical Description: | 492-500 |
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| ISSN: |
0732-2399
1526-548X |
| DOI: | 10.1287/mksc.1070.0323 |
| published in: | Marketing Science |
| Language: | English |
| Subjects: | |
| Collection: | Institute for Operations Research and the Management Sciences (INFORMS) (CrossRef) |
<jats:p> We analyze a large-scale field test conducted with a mail-order catalog firm to investigate how customers react to premium prices for larger sizes of women's apparel. We find that customers who demand large sizes react unfavorably to paying a higher price than customers for small sizes. Further investigation suggests that these consumers perceive that the price premium is unfair. Overall, premium pricing led to a 6% to 8% decrease in gross profits. </jats:p> |