| Title: | Does Demand Fall When Customers Perceive That Prices Are Unfair? The Case of Premium Pricing for Large Sizes; |
|---|---|
| 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 |
|---|---|
| ISSN: |
0732-2399
1526-548X |
| published in: | Marketing Science |
| Language: | English |
| Subjects: | |
| Collection: | sid-55-col-jstoras4 sid-55-col-jstorbusiness1archive sid-55-col-jstorbusiness JSTOR Arts & Sciences IV Archive JSTOR Business I Archive JSTOR Business & Economics |
<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.</p> |