Price partitioning on the internet

Research output: Contribution to journalArticle

Abstract

The Internet provides managers with opportunities to monitor and manage their pricing strategies and tactics with minimum costs. Partitioning the total product sale price into a base price and various surcharges, such as shipping and handling, taxes, and other fees, is one way to manage price structures online. Using three experiments, our research shows that appropriate online price partitioning may enhance consumers' purchase intentions, perceived value, and price satisfaction, and reduce further information search intentions. The effect of price partitioning is due to both consumers' insufficiently adjusting for the surcharge and the clarity of the price structure provided. However, when multiple surcharges are added to partition the price further, these positive effects may decline leading to an inverted "U" shape function of partitioning on price perceptions. Finally, the amount and the way the surcharges are presented are important factors to consider when designing an effective price partitioning structure.

Original languageEnglish (US)
Pages (from-to)63-73
Number of pages11
JournalJournal of Interactive Marketing
Volume18
Issue number4
DOIs
StatePublished - Jan 1 2004

Fingerprint

Partitioning
World Wide Web
Experiment
Shipping
Pricing strategy
Factors
Purchase intention
Price perception
Information search
Tax
Inverted-U
Tactics
Fees
Perceived price
Managers
Costs
Perceived value

ASJC Scopus subject areas

  • Business and International Management
  • Marketing

Cite this

Price partitioning on the internet. / Xia, Lan; Monroe, Kent Bourdon.

In: Journal of Interactive Marketing, Vol. 18, No. 4, 01.01.2004, p. 63-73.

Research output: Contribution to journalArticle

@article{fae34ba8f6294ed6b9dc439bcbb07f59,
title = "Price partitioning on the internet",
abstract = "The Internet provides managers with opportunities to monitor and manage their pricing strategies and tactics with minimum costs. Partitioning the total product sale price into a base price and various surcharges, such as shipping and handling, taxes, and other fees, is one way to manage price structures online. Using three experiments, our research shows that appropriate online price partitioning may enhance consumers' purchase intentions, perceived value, and price satisfaction, and reduce further information search intentions. The effect of price partitioning is due to both consumers' insufficiently adjusting for the surcharge and the clarity of the price structure provided. However, when multiple surcharges are added to partition the price further, these positive effects may decline leading to an inverted {"}U{"} shape function of partitioning on price perceptions. Finally, the amount and the way the surcharges are presented are important factors to consider when designing an effective price partitioning structure.",
author = "Lan Xia and Monroe, {Kent Bourdon}",
year = "2004",
month = "1",
day = "1",
doi = "10.1002/dir.20017",
language = "English (US)",
volume = "18",
pages = "63--73",
journal = "Journal of Interactive Marketing",
issn = "1094-9968",
publisher = "Elsevier Limited",
number = "4",

}

TY - JOUR

T1 - Price partitioning on the internet

AU - Xia, Lan

AU - Monroe, Kent Bourdon

PY - 2004/1/1

Y1 - 2004/1/1

N2 - The Internet provides managers with opportunities to monitor and manage their pricing strategies and tactics with minimum costs. Partitioning the total product sale price into a base price and various surcharges, such as shipping and handling, taxes, and other fees, is one way to manage price structures online. Using three experiments, our research shows that appropriate online price partitioning may enhance consumers' purchase intentions, perceived value, and price satisfaction, and reduce further information search intentions. The effect of price partitioning is due to both consumers' insufficiently adjusting for the surcharge and the clarity of the price structure provided. However, when multiple surcharges are added to partition the price further, these positive effects may decline leading to an inverted "U" shape function of partitioning on price perceptions. Finally, the amount and the way the surcharges are presented are important factors to consider when designing an effective price partitioning structure.

AB - The Internet provides managers with opportunities to monitor and manage their pricing strategies and tactics with minimum costs. Partitioning the total product sale price into a base price and various surcharges, such as shipping and handling, taxes, and other fees, is one way to manage price structures online. Using three experiments, our research shows that appropriate online price partitioning may enhance consumers' purchase intentions, perceived value, and price satisfaction, and reduce further information search intentions. The effect of price partitioning is due to both consumers' insufficiently adjusting for the surcharge and the clarity of the price structure provided. However, when multiple surcharges are added to partition the price further, these positive effects may decline leading to an inverted "U" shape function of partitioning on price perceptions. Finally, the amount and the way the surcharges are presented are important factors to consider when designing an effective price partitioning structure.

UR - http://www.scopus.com/inward/record.url?scp=7444240903&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=7444240903&partnerID=8YFLogxK

U2 - 10.1002/dir.20017

DO - 10.1002/dir.20017

M3 - Article

AN - SCOPUS:7444240903

VL - 18

SP - 63

EP - 73

JO - Journal of Interactive Marketing

JF - Journal of Interactive Marketing

SN - 1094-9968

IS - 4

ER -