ReachCustomersOnline.com

Consumer Perceptions of Price (Un)Fairness

Posted by TimSlavin at September 30, 2003

"A series of studies demonstrates that consumers are inclined to believe that the selling price of a good or service is substantially higher than its fair price. Consumers appear sensitive to several reference points—including past prices, competitor prices, and cost of goods sold—but underestimate the effects of inflation, overattribute price differences to profit, and fail to take into account the full range of vendor costs. Potential corrective interventions—such as providing historical price information, explaining price differences, and cueing costs—were only modestly effective." Eighteen page research report (in PDF) about different factors customers use to gauge whether prices are fair (or not). Found through MarketingProfs BlogBytes which appears not to have permanent links (so you can't read the original post).

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