Journal of Product & Brand Management

Cross-cultural equivalence of price perceptions across American, Chinese, and Japanese consumers : Table of Contents

Juan (Gloria) Meng, Suzanne Altobello Nasco — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – The purpose of this paper is to apply Lichtenstein et al.'s price perception model to American, Chinese and Japanese cultures, to test the measurement equivalence across three cultures, and to compare the price perception constructs across three cultures using equivalent instruments. Design/methodology/approach – A questionnaire is used to collect information on more than 500 student respondents from America, China, and Japan. Findings – Utilizing structural equation modeling, a 21-item version of Lichtenstein et al.'s scale is created that has good fit across the three cultures. In progressively constraining tests, good model fit is found when constraining or partially constraining the factor loadings, error correlations, factor variances, and correlations between factors to be equal across three cultures tested. In addition, after creating price perception subscales, no significant differences emerge between Chinese, Japanese, and US consumers on value consciousness or price/quality schemas. Significant differences emerge on price consciousness, prestige sensitivity, and sales proneness. Practical implications – The 21-item scale of Lichtenstein et al.'s price perception model can be generalized to both China and Japan. The primary conclusions (i.e. that Chinese consumers reported significantly higher price and prestige sensitivity, compared to USA and Japanese consumers, while US consumers showed higher levels of sales proneness than Chinese and Japanese consumers) provide a rationale for international retailers to develop different pricing and promotional strategies when expanding their business into these three cultures. Originality/value – A 21-item scale to measure five of Lichtenstein et al.'s price perception constructs that has been validated through measurement invariance tests and compared across consumers in China, Japan, and the USA is provided.

The effects of product digitalization and price dispersion on search intentions in offline versus online settings: the mediating effects of perceived risks : Table of Contents

Dipayan Biswas, Bidisha Burman — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – The purpose of this paper is to examine how a product-related variable like digitalization and a market-related variable like price dispersion might differentially influence consumer search intentions across offline versus online shopping interfaces, and how this relationship might be mediated by consumers' perceived risks. Prior research findings are extended and examines how the perceived risk – search intention relationship might be different in online contexts. The distinction is drawn between perceived performance risk versus perceived transaction risk and examines how each of these risks would differentially influence search intentions across the two shopping interfaces (offline versus online). Design/methodology/approach – Two experimental studies are conducted. Findings – Study 1 shows that under conditions when perceived performance risks are enhanced, such as for non-digitalized (versus digitalized) products, consumers' search intentions are enhanced, with the effects getting magnified in online shopping interfaces. In Study 2, the effects of a condition are examined when instead of performance risks, transaction risks are enhanced by a market-related variable – price dispersion. The results of Study 2 show that when there is higher price dispersion in the marketplace, in the offline environment, participants have higher search intentions, while in the online environment, participants have lower search intentions. In addition, the effects of price dispersion on search intention in the online environment are mediated by perceived transaction risk. Originality/value – Limitations of the studies suggest that future research may extend these findings to include non-student samples, differential search costs, customer-related factors like trust and involvement, other types of risks like social and psychological, social networking sites, and multichannel search behaviors.

Individual effects of product quality signals in the presence versus absence of other signals: differential effects across brick-and-mortar and online settings : Table of Contents

Dipayan (Dip) Biswas, Sujay Dutta, Abhijit (Abe) Biswas — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – The purpose of this paper is to study the effectiveness of multiple signals. Specifically, the paper investigates how the individual strength of a marketplace signal varies as a function of whether consumers are exposed to that signal alone or in combination with another signal. Design/methodology/approach – The research uses experimental designs to empirically address the research questions. Hypotheses are formulated primarily based on signaling theory and these hypotheses are tested with laboratory experiments using real consumers. Findings – The key finding is that a signal's stand-alone credibility largely determines whether its individual strength would be diluted or augmented by the coexistence of another signal. Further, when signals with different stand-alone strengths coexist, the individual strength of the weaker signal is higher than when that signal is present alone. These effects are observed in brick-and-mortar and online shopping media. Originality/value – Past research reports mixed findings about whether the individual strength of a signal is diluted (dilution effect) or augmented (augmentation effect) by the presence of another signal. This research attempts to resolve this issue, for the first time, by demonstrating that whether dilution effect or augmentation effect occurs depends on the stand-alone credibility of the individual signals in a mix.

A demand-based model for the advance and spot pricing of services : Table of Contents

Irene C.L. Ng — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – The purpose of this paper is to study the non-consumption of a service by advance buyers, the re-selling of relinquished capacity at spot time and the effect on the pricing of advance and spot demand of services. Design/methodology/approach – The paper employs mathematical economics modeling technique. Findings – The model shows that advance prices are always lower than spot prices due to the non-consumption effect and also that providing a refund to advance buyers, as insurance against non-consumption, may be. By modeling in the capacity of the firm, the paper also presents the firm's capacity conditions when the firm does not sell in advance and also when market failure occurs i.e. when the firm does not sell in advance nor at consumption time. Research limitations/implications – The model does not consider uncertainty in the spot price and assumes a one-stage optimization. Furthermore, the model extension with refund is numerically derived. Practical implications – This model informs industry on the significance of non-consumption of a service and the re-selling of relinquished capacity. It also highlights the importance of the interaction between capacity and refunds in advance and spot selling. Originality/value – This paper contributes to extant literature by demonstrating that when heterogeneous demand behavior is explicitly modeled with non-consumption, capacity and refunds, firms would then be able to understand where and how service revenue is being obtained (higher price or higher demand) and the impact of various sensitivities on revenue.

Cross-country analysis of price levels and dispersion in online and offline environments: an empirical analysis in France and Germany : Table of Contents

Fabio Ancarani, Frank Jacob, Frédéric Jallat — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – The purpose of this research is to take into consideration the country effect in online and offline environments and compares price levels and dispersion online v. offline across the two largest Continental European markets, thus adding a new dimension in price comparisons and multichannel pricing strategies. Design/methodology/approach – Based on an empirical analysis of data collected in one product category (CDs), our findings for France and Germany show that price levels -including shipping costs – are always higher online than offline in each country and price dispersion is persistent across markets. Calculating mean prices for the two countries, ANOVA tests reveal significant differences among the two sets of data. Using standard deviation as the measurement for price dispersion, Levene statistics reveal a higher degree of online price dispersion than offline and statistically significant differences between the two sample countries. Findings – Even if our approach need to be extended to more product categories and more countries, our article may be interesting for practitioners, policy makers and managers. It clearly shows that the “frictionless capitalism and cost transparency hypothesis” has proven to be wrong most of the time even if many retailers still believe they must sacrifice the possibility of pricing up when they go on the internet. As demonstrated by our findings, retailers can take advantage of online relative indifference to price to capture some margin premium and enjoy excellent results. Originality/value – Our results also demonstrate that, even if results show some similarities and common trends, differences among France and Germany still remain important. As a consequence, marketers should continue to approach the European marketplace with full awareness of its diversity.