Fair Prices and Profits Across Channels
Open Access
- Author:
- Gonzales, Gabe Ezekiel
- Graduate Program:
- Business Administration
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- May 16, 2019
- Committee Members:
- Margaret Grace Meloy, Dissertation Advisor/Co-Advisor
Lisa Elizabeth Bolton, Committee Chair/Co-Chair
Johanna H Slot, Committee Member
Francis Erin Dardis, Outside Member
Lisa Elizabeth Bolton, Dissertation Advisor/Co-Advisor
Margaret Grace Meloy, Committee Chair/Co-Chair - Keywords:
- marketing
consumer behavior
price fairness
retailing - Abstract:
- Consumers in today’s multi-channel marketplace have an abundance of choice, not only in the assortment of products to choose from, but also in the number of channels from which to make purchases. This research compares the fairness of prices and profits (from the consumer’s perspective) across channels selling the same item, finding that producers (e.g., a company store) can charge a higher price than retailers (e.g., a department store) for the exact same product and be considered fair. Three initial studies demonstrate the robustness of this effect with varying audiences and product categories (e.g., women shopping for a wedding dress, college graduation attendees recalling a recent purchase). Further, consumers are found to see producers as entitled to higher profits relative to retailers when selling identical products, even when this difference in profits is made salient. The difference in fair prices is mediated by consumers’ relatively greater valuation of producers’ production-focused activities over retailers’ selection-focused activities. The author subsequently develops theory regarding potential strategies for retailers to mitigate this fairness gap. In one study, the difference in fair profit between a retailer and a producer is mitigated for a retailer selling a private label good. In another, the strategy of broadening (vs. narrowing) a retailer’s assortment is shown to increase fair profit perceptions, but only for consumers who are particularly likely to value retailers’ selection activities (i.e., market mavens). The author discusses implications for theory regarding price fairness and multi-channel retailing, before providing considerations for retailers in an increasingly competitive marketplace and proposing directions for future research.