Variable pricing and its impact on consumer trust

McMahon-Beattie, Una Sinead (2009) Variable pricing and its impact on consumer trust. PhD thesis, University of Gloucestershire.

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rust is a complex relational construct which has received much attention in marketing literature in recent years. Indeed it has been seen to be at the philosophical heart of Relationship Marketing with its focus on establishing, developing and maintaining effective, ongoing relational exchanges (Morgan and Hunt, 1994; Takala and Uusitalo, 1996) and it has been positioned as an important antecedent, mediator and outcome of buyer seller relationships. In the service industries where demand is variable and fixed costs are a high proportion of total costs, the practice of Revenue Management through variable pricing has become widely accepted as a method for maximising financial returns. However, price discrimination which is implicit in Revenue Management systems may undermine trust in an organisation, when buyers perceive that they have been treated less fairly than other buyers (McMahon-Beattie and Palmer, 2007). Trust is at the heart of Relationship Marketing strategies, therefore there would appear to be a potential conflict between the aims of Relationship Marketing/Customer Relationship Management and Revenue Management. This research was motivated by a shortage of studies in the area of Revenue Management that seek to integrate operational efficiency with human perceptions and attitude change. The bulk of research into the effectiveness of Customer Relationship Management-based Revenue Management systems has focused on short-term behavioural change rather than affective and behavioural consumer responses. As such the aim of this research therefore was to understand the link between the use of variable pricing and customer's affective and behavioural responses. The research used a post-positivistic, mixed methodology to advance knowledge. The main study employed a quasi-experimental approach involving an ongoing longitudinal study, where manipulated price messages relating to a real service offer were sent to 2273 customers on a hotel chain's database. The prospects were divided into an experimental group (variable prices for a specified product offer) and a control group (constant prices). The findings indicated that it is not variable pricing in itself that causes consumer trust/distrust. Indeed, based on a re-investigation of the bivariate analysis and on the feedback gained at various marketing conferences, it is suggested that consumers' level of knowledge of the "rules" in which variable pricing operates may well cause trust/distrust. From experience of the benefits that variable pricing may bring to a consumer, and based on an understanding of how and why these benefits may be obtained (for example, low hotel prices to clear spare capacity at a quiet time of year), consumers may come to trust a business' use of variable pricing as a legitimate business practice. This research therefore recommends that further research needs to be undertaken into a proposed construct of Rule Familiarity and the development of appropriate items for the construct.

Item Type: Thesis (PhD)
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Additional Information: A print copy of this thesis is available for reference use only.
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Subjects: H Social Sciences > HF Commerce > HF5001 Business > HF5428 Retail Trade
Divisions: Schools and Research Institutes > Gloucestershire Business School
Depositing User: Susan Turner
Date Deposited: 22 Feb 2022 09:28
Last Modified: 22 Feb 2022 09:28

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