Online Travel Agency Price Presentation: Examining the Influence of Price Dispersion on Travelers’ Hotel Preference

This research investigates the impact of different degrees of price dispersion on travelers’ hotel choice. More specifically, within an online travel agency (OTA) context, we examine the effect of wide (vs. narrow) price dispersion on hotel preference. In addition, we suggest two boundary conditions for this effect: salience of external regular price and perception of destination uncertainty. Across multiple studies, our results show that travelers prefer a hotel option featuring wide price dominance dispersion. Additionally, both the presence of an external regular price and the level of uncertainty associated with the hotel destination act as moderating influences. This work represents an emerging direction in the online price dispersion literature, namely, exploring the consequences of online price dispersion. In practice, by understanding the influence of price dispersion on consumer choice, OTAs can develop more effective pricing strategies in partnership with their hotel room suppliers.

When Does Partitioned Pricing Lead to More Favorable Consumer Preferences?: Meta-Analytic Evidence

Evidence of the impact of partitioned pricing is contradictory. Research indicates that partitioning a price into multiple components can result in more favorable preferences, due to a lower recalled price, or less favorable preferences, due to unfavorable surcharge evaluations. To explain these divergent effects, the authors examine the role of price presentation moderators, which reflect how managers convey prices to consumers (e.g., Is the total price present or absent?), magnitude moderators, which reflect the actual prices charged (e.g., What is the surcharge magnitude?), and contextual moderators, which reflect nonprice transaction characteristics (e.g., Is the product category hedonic or utilitarian?). A meta-analysis of 17 years of partitioned pricing research examining 149 observations in 27 papers (N = 12,878) suggests that consumers respond more favorably to partitioned pricing than to all-inclusive pricing when the total price is absent, as the price level increases, when the surcharges are typical for the product category, when the surcharges are perceived as offering high benefit, and when the product category is utilitarian.

The effect of saving format (”%-off” vs. ”amount-off”) on the change of internal reference price: an empirical study

Recently, price promotion campaigns have been used increasingly in the commercial sector. Since, for marketing specialists, price presentation has a strong impact on consumer perceptions, it is important to organize price promotions that consumers perceive positively. Purpose: The first objective of this study is to examine the effects on the consumer internal reference price of saving formats displayed in %-off as opposed to those expressed as amount-off. The second objective of the paper is to analyse whether the moderating effect of the discount level (low vs. high) and price confidence (low vs. high) will influence the main relationship between saving format and change of internal reference price. Methodology: In order to achieve the objective of the current research, both primary and secondary data were examined. Secondary data were gathered from reliable sources on price promotion, whereas primary data were collected through a survey. Findings: The results of the empirical research give suggestions to retailers as to which format of price promotion to select in order to diminish or avoid drastic reductions of the consumer internal reference price, considering the discount level and consumer characteristics such as price confidence.

Evaluation effects of bundle size and price presentation

Purpose Marketers often combine products in bundles to increase demand. Research has shown that itemizing the prices of the individual products in the bundle raises evaluations in some situations. The purpose of this paper is to investigate how bundle size influences the effect itemizing prices have on bundle evaluation. Design/methodology/approach The authors conduct two experiments. In the first, they test the effects of price presentation formats (itemized vs consolidated) and bundle size on consumers’ evaluations of product bundles. In the second experiment, they test the proposed mechanism that itemizing the price leads to a more realistic price expectation which in turn enhances evaluation. The authors also test whether this effect is stronger for larger bundles. Findings In Study 1, the authors find that large, but not small, bundles are evaluated more positive when presented with itemized prices. In Study 2, mediated moderation analysis supports the prediction that price expectation mediates the effect of the price presentation × bundle size interaction on bundle evaluations. The findings show that itemizing prices results in more realistic price expectations and that this effect is stronger for larger bundles. In turn, more realistic price expectations lead to higher evaluation. Research limitations/implications The implication of this research is that by directing attention to individual items in the bundle, consumers are better able to assess bundle benefits. More research is needed to investigate other potential explanations for the findings in Study 1. Further research should also investigate whether the findings reported here holds in other settings, with other products and with other types and size of bundles. Practical implications Managers are recommended to itemize the prices of product bundles, particularly when bundles are large. Originality/value This paper extends our knowledge about the effect itemizing the prices of individual items in a bundle has on consumer evaluation by demonstrating the moderating effect of bundle size and showing that more realistic price expectation explains these effects.