Preeti Narwal and Jogendra Kumar Nayak
The purpose of this paper is to explore the applicability of Pay-What-You-Want (PWYW) pricing multi-channel retailing. Specifically, the impact of PWYW endogenous price…
Abstract
Purpose
The purpose of this paper is to explore the applicability of Pay-What-You-Want (PWYW) pricing multi-channel retailing. Specifically, the impact of PWYW endogenous price discrimination on consumers’ price fairness perception of and reactions to PWYW is investigated.
Design/methodology/approach
Three empirical studies with different product categories were conducted through lab experiments with student sample using scenario-based experimental approach.
Findings
Results indicate the viability of PWYW with lower suggested external reference price. The impact of PWYW endogenous price discrimination is dependent upon the magnitude of price deviation from regular market price and product category. Consumers’ negative perceptions of price differentiation interacted with their underlying beliefs about the retailer’s cost of products across different channels. PWYW acceptance can be fostered in multi-channel by communication of additional-value generated in offline selling.
Originality/value
The current research is possibly the first to explore PWYW viability in the multi-channel context by exploring the consumer’s price perception process and critical consumer reactions through a well-structured research framework.
Details
Keywords
Preeti Narwal and Jogendra Kumar Nayak
This paper aims to investigate consumer behaviour in response to social norms under pay-what-you-want (PWYW) pricing. Specifically, it explores the critical role of social norms…
Abstract
Purpose
This paper aims to investigate consumer behaviour in response to social norms under pay-what-you-want (PWYW) pricing. Specifically, it explores the critical role of social norms such as norm priming and consumer prior trust in the retailer on consumers’ perceived price fairness, trust, willingness to pay, purchase intentions and intentions to spread negative word of mouth about the retailer.
Design/methodology/approach
Data on dependent measures were collected through the scenario-based online experimental approach and assessed using MANOVA analysis.
Findings
Results confirm the significance of norms by indicating the critical role of norm belief on consumer responses. Also, increasing the salience of norms by priming them usually intensifies negative behaviour, and pre-existing trust in the retailer serves as an imperfect cushion against consumer negative reactions to norm violation, but this effect is observed to be decreasing with increase in prior trust.
Research limitations/implications
Further research should consider the contextual (time, place, media) influences and assumptions to increase the generalizability of the findings.
Originality/value
To the best of the authors’ knowledge, this is the first paper to explicitly examine the effects of social-norm compliance by sellers on consumer behaviour in the context of PWYW pricing.
Details
Keywords
Pay what you want (PWYW) is a participative pricing mechanism that permits customers complete freedom to choose prices. PWYW literature reports the influence of external reference…
Abstract
Purpose
Pay what you want (PWYW) is a participative pricing mechanism that permits customers complete freedom to choose prices. PWYW literature reports the influence of external reference price (ERP) on customers' price decisions and payments. The current research examines the influence of ERP presence, salience and understanding at the seller level by analysing customers' perceptions of seller price image dimensions and purchase intentions.
Design/methodology/approach
Study 1 tests the impact of ERP presence and salience in controlled lab settings while Study 2 takes this investigation further by including the moderating effect of ERP understanding on seller price image dimensions and purchase intentions in online settings.
Findings
Results illustrate the positive impact of ERP presence on all seller price image dimensions excluding the perceived price level. Perceived price fairness mediates the impact of ERP presence on perceived value. ERP salience positively impacts price processability. ERP presence and salience attached to it positively impact customers' purchase intentions through seller price image dimensions.
Originality/value
This is possibly the first paper to investigate the ERP effect on seller price image dimensions in a PWYW context that lacks fixed posted prices.