Sarah Maxwell

An expanded price/brand effect model ‐ A demonstration of heterogeneity in global consumption

In this study, the homogeneity versus heterogeneity of global consumption is tested in a cross‐cultural price/brand effect model. Middle‐class consumers in two countries are compared: the USA, an established consumer society, and India, a recently developing consumer society. Focus groups demonstrate the tremendous importance of brands in India, but survey data suggest that, compared to Americans, Indians actually have a lower perception of brand quality. They need to be convinced of standardized quality. Indians are, in addition, more positive than Americans about economizing. This implies that they feel guilty about consumption. These differences between Americans and Indians influence how price and brand affect their different purchase decisions: the Indian is a much tougher consumer to whom to sell. The results suggest that consumption, while it is becoming global, is still heterogeneous. It is being interpreted and implemented differently in different cultures.

Less pain, same gain: The effects of priming fairness in price negotiations

This research demonstrates that, by priming a consideration for fairness, a seller can increase a buyers satisfaction without sacrificing profit. In simulated negotiations, participants primed to consider fairness demonstrated more cooperative behavior, making greater concessions that led to faster agreement. Fairness-primed buyers consequently had a more positive attitude toward the seller and expressed significantly greater positive subjective disconfirmation of their expectations. These results show how self-interest and social utility can work in concert once a concern for fairness is activated. The results support the Models of Social Utility and Group Identification and confirm the Expectancy Disconfirmation Model of Negotiations.

Pricing education in the United States of America: responding to the needs of business

In the affluent 1960s and 1970s, consumers tended to be price insensitive. Business consequently placed a low priority on pricing, and marketing educators in the USA responded by stressing the non‐price elements of the marketing mix. As a result, when consumers became more price sensitive in the 1980s and 1990s, and business became more concerned about pricing, marketing was not involved. Now, however, marketing educators are beginning to respond to the renewed emphasis on price as a key component in consumers’ perceived value. A new study shows an increase from 4 to 13 percent of US marketing education programs now including a course in pricing; another 22 percent are interested in adding one within two years.

The wrath of the fairness-primed negotiator when the reciprocity norm is violated

Abstract Prior research has demonstrated that buyers primed to think of fairness are more cooperative in price negotiations. This research was based on the seller responding in accordance with the norm of reciprocity. The present research supports these results, but shows that when sellers do not reciprocate the buyers cooperative behavior, fairness-primed buyers act to punish the seller. They retaliate by becoming radically competitive. Priming a concern for fairness appears to sensitize negotiators to social concerns. They act more fairly and more emotionally and demand fair treatment in return. They are, therefore, both more cooperative when their opponent reciprocates and less cooperative — seemingly even vindictive — when their opponent does not.

Biased attributions of a price increase: effects of culture and gender

In developing pricing strategies for the global marketplace, sellers have to consider the differences in how their consumers process information on prices. One potential difference is in attributions: whether the consumer blames the seller for a negative outcome such as a price increase. Prior research suggests that in individualistically oriented groups such as Anglos (and perhaps males), causal attributions are egocentrically biased: the cause of a negative outcome tends to be attributed to the actions of another person. In collectively oriented groups such as Hispanics (and perhaps females), the bias is much less. Empirical results, however, reveal that all groups demonstrate biased attributions of price increases. As a result, they have a less positive attitude toward the seller. The difference is that Hispanics and females generally infer that sellers have behaved in a more socially approved manner than do Anglos and males.

Gender differences in the response to unfair prices: a cross‐country analysis

Purpose – The research questions are whether there is a difference in how men and women respond to unfair prices and, if so, whether this gender difference extends across national cultures. Is the difference due to nature or to nurture? This paper aims to answer these questions.Design/methodology/approach – The study uses scenarios to conduct a survey‐based analysis of the effects of gender and country on responses to personally and socially unfair prices.Findings – The results indicate that the response to price unfairness is due more to nurture than to nature. Although American females tend to be more sensitive than men to price unfairness, there is little or no difference between men and women in Germany and South Korea: both sexes there react negatively to an unfair price, particularly when the seller has acted unjustly.Practical implications – In the USA, the gender difference in response to unfair prices suggests that different pricing tactics should be used for men than for women. However, since ma...

Fair price: research outside marketing

Purpose – The purpose of this paper is to summarize the current research in disciplines outside marketing that applies to price fairness: research by behavioral economists, primate behavior researchers and social neuroscientists.Design/methodology/approach – The approach is descriptive, summarizing the extensive research into fairness being done in disciplines other than marketing.Findings – Research outside marketing indicates that a fair price is a preference. It has social utility that is independent of the economic utility of a low price. Consumers can actually harm themselves to punish what they perceive to be an unfair price. Conversely, a fair price triggers the reward center of the mind, stimulating happiness. The research also indicates that the response to a fair or unfair price is emotional: fast and automatic. The strength of that emotional response to unfairness varies across people. However, despite the variation in reactions, to ignore the concern for fairness is to miss a major motivation ...

The two components of a fair price: social and personal

Purpose – The purpose of this paper is to isolate the effects of personal fairness (the consumers evauation of the magnitude of the price) and the social fairness (the acceptability of the price given the social norms of the society).Design/methodology/approach – This research adapted the scenarios used in the pivotal fair pricing study conducted by Kahneman, Knetsch and Thaler. To demonstrate the difference between their results and the results when personal and social fairness were separated, the analysis replicated that of Kahneman, Knetsch and Thaler.Findings – The paper finds that an individuals self‐serving concern for a personally fair price is moderated by their other‐serving concern for a socially fair price.Research limitations/implications – This research demonstrates that there is a significant difference in the personal and social fairness of price, whether it is a price for goods, wages or rents.Practical implications – Sellers, employers and realtors can benefit from the knowledge that pr...

How Culture Affects Attributions, Fairness and Willingness to Purchase

The cultural dimension of individualism/collectivism affects causal attributions of adverse outcomes such as price increases: sellers are blamed less by collectivist Hispanics than by individualistic Anglos. The difference, however, is negated by collectivists’ lower evaluation of the seller’s fairness. There is consequently no difference in their willingness to purchase.

Cross Cultural Complaint Behavior Due to a Price Increase

This study tests the differences in complaint behavior due to a price increase among consumers in Brazil, China, Germany, and the United States. The results indicate that when a price is increased, complaint behavior varies due to the relative power of the seller, the stage of development of the country, and the buyers’ perception of their own affluence. An increase in complaint behavior was found to be associated with a higher level of development and consumer power: respondents in the transition economies of Brazil and China were not likely to complain. Germans were an anomaly because, despite being a developed country in which the consumer has considerable power, they were still loath to complain. In addition, in all four countries, those respondents who felt they were relatively affluent were more likely to accept a price increase without complaining.