I think I am ‘’priced’’: the effects of dynamic pricing on emotions and brand evaluations

Bourgonje, K. (2016) I think I am ‘’priced’’: the effects of dynamic pricing on emotions and brand evaluations.

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Abstract:A growing amount of e-commerce businesses are using cookies to decide which price should be asked to consumers. This technique of following online consumers to boost revenue and profit is called dynamic pricing. With the help of newspapers and social media, (online) consumers are becoming more aware that dynamic pricing is used, although the effects of dynamic pricing on consumers thoughts or behaviour are not known yet. This study focuses on the effects of dynamic pricing, including the different price margins, on the emotions and thoughts people have, and to which brand evaluations that leads. What if consumers found out they have been ‘’priced’’ because of their personal interests, search histories, or other personalized data? With the help of an experimental study (N=163), results indicated that valences of dynamic pricing do have an effect on the way how people feel, think and evaluate platforms and brands. Whereas higher prices enhanced a negative affect, and lower prices a positive affect. Increasing margins of price differences did not lead to different responses. The degree of brand loyalty did not moderate the effects on how people perceive the price to be fair, and how people evaluate brands. Furthermore, evidence was found that people also blame themselves for online price changes. This study is relevant for marketers to increase insights in the effects of applying dynamic pricing strategies. E-business industry can make use of this ‘’who to blame’’ thought, and can try to remove their responsibility by, for example, adapting their communications, before more information about dynamic pricing strategies reaches the big crowd. For scientific research, this study offers insights in the way how people respond when personalized data is used for price setting. Keywords: dynamic pricing, cookies, emotions, price fairness, and brand evaluations.
Item Type:Essay (Master)
Clients:
Unknown organization, Nederland
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:05 communication studies
Programme:Communication Studies MSc (60713)
Link to this item:http://purl.utwente.nl/essays/69147
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