“SAYS WHO?!” HOW THE SOURCE OF PRICE INFORMATION AND AFFECT INFLUENCE PERCEIVED PRICE (UN)FAIRNESS

Price fluctuations are common in today’s marketplace. Such situations for the same item or product are frequent, and consumers learn about price increases and decreases from various sources. The source of price change information can be human (e.g., store personnel) or nonhuman (e.g., price tags, newspaper circulars, direct mail). Although consumers learn about price changes from various human and nonhuman sources, neither researchers nor managers appear to consider whether the source of price change information influences consumers’ reactions to prices.

In this research, Margaret C. Campbel examines the influence of the direction of a price change and the source of price change information on consumers’ perceptions of the price and, in particular, their perceptions of price (un)fairness (PPU). She emphasizes three important points about the research on PPU. First is the role of cognition in PPU. The purpose is to test the proposition that the source of price change information moderates the impact of a price change on PPU and to examine the proposed process model and the role of affect in PPU.


This research is really important to determine the pricing strategies and marketing activities that is offered to consumers. Perceptions of price (un)fairness encompass a consumer’s subjective sense of a price as right, just, or legitimate versus wrong, unjust, or illegitimate. Such perceptions influence multiple important marketplace factors, such as intentions, willingness to pay, and willingness to engage in business with a firm. Evidence suggests that consumers’ perceptions of price (un)fairness can limit firm profits. Consumers avoid conducting business with and sometimes attempt to punish unfair firms; thus, many firms modify their behavior out of concern that consumers will avoid firms they perceive as unfair. Overall, research has focused on the role of cognition in perceptions that a price increase is unfair. For example, the influential research on the principle of dual entitlement indicates that perceptions of price (un)fairness are based on the transactor’s (e.g., the consumer’s) beliefs. Specifically, the consumer has certain beliefs about the reference for a given price and perceives a price increase as unfair when it appears that the firm is gaining greater profits by violating the reference price.
This research uses various research streams, including price fairness, source effects, moral psychology, and the influence of affect on judgment and choice. Margaret C. Campbell offers two major propositions. First, he suggests that as does cognition, affect plays a causal role in PPU. Existing research on price (un)fairness focuses on the cognitive underpinnings of PPU; the current research contributes to this by demonstrating that affect is also a component. Second, he hypothesizes that the source of price change information moderates the impact of the price change on PPU. Because of this, he had conducted and analysed three studies. In study 1, it was examined the moderating effect of source on the influence of a price change on perceptions of price (un)fairness. In addition it was analysed the hypothesized process in which inferred motive and stimulus-induced affect mediate the effects of source and price change on PPU. In study 2, it is examined source and price change effects on PPU both when processing is unconstrained (as in Study 1) and when processing is constrained, thus increasing the influence of affect. In study 3, whether a rationale is provided for a price decrease is manipulated to allow for further examination of the influence of affect on PPU.
In conclusion, the three studies show that whether a source is human or nonhuman influences the effect of a price change on (un)fairness perceptions. Both inferences of the marketer’s motive and stimulus-induced affect mediate the effects of the source and price change. Opportunity and motivation to process also affect the relative influence of inferred motive and affect. This research demonstrates antecedent roles of both price source and affect. The research presented also furthers the understanding of consumers’ PPU and how these are shaped. Whereas prior research on price fairness focused on cognitive influences, such as consumers’ thoughts about previous prices and product costs, inferences of motive, and thoughts about appropriate pricing rules, the current research proposes and supports an important role of affect. This research contributes to the existing price fairness literature by showing across three studies that affect (feelings or emotions toward a price situation) can have an important influence on PPU, when processing resources are and are not constrained. The support for the antecedent role of affect opens new directions for research. By demonstrating the important role of affect on price fairness, this research contributes to the fairness literature in a general sense. This research begins to shed light on differences that may arise when marketplace information is presented by a human versus a nonhuman source. At this time, it is important to understand further how consumers respond to human versus nonhuman sources, as well as what situational factors influence cognitive inferences and affective reactions to marketing sources.



Source :MARGARET C. CAMPBELL, Journal of Marketing Research,261 Vol. XLIV (May 2007)

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