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Making your own choices? : an investigation of the influence of horizontal price presentation order, star-ratings & product type on average revenue in online web-shop environments.

Rensner, F.J. (2017) Making your own choices? : an investigation of the influence of horizontal price presentation order, star-ratings & product type on average revenue in online web-shop environments.

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Abstract:AIM. The primary aim of this study was to investigate the extent to which horizontal price presentation order (PPO) influences product choices and therefore average revenue (in €) in online web-shop environments. In addition to this, it was studied to what extent the potential effect of horizontal price presentation order on average revenue (in €) would be influenced by both star-ratings as quality indicators and product types. Direct effects of both star-ratings and product type on average revenue (in €) have been studied as well, as (pricing) literature suggests both factors to influence average revenue (in €) regardless of the PPO employed. Furthermore, the potentially mediating role of price-, and quality-perceptions on the effects of horizontal price presentation order, star-ratings and product type on average revenue has been studied, as well as the direct effect of horizontal PPO, star-ratings and product type on both price- and quality-perceptions. METHOD. The present study was conducted by employing a 2 (horizontally descending PPO vs. horizontally ascending PPO) x 3 (descending star-ratings vs. ascending star-ratings vs. no star-ratings) x 2 (high-knowledge product vs. low-knowledge product) between-respondents, scenario-based experimental research design. Data collection was performed by the use of an online-survey in which participants got to see one of the twelve different web-shop environments. During the survey, participant’s product choice (average revenue in €), perception of both price- and quality, as well as level of product knowledge was measured. A total of 303 participants, mainly from the University of Twente participated in the conducted study. RESULTS. The results of this study show a significant interaction effect of horizontal PPO and star-ratings on average revenue (in €). In addition, both horizontal PPO and star-ratings have a significant main effect on quality-perception. Product type (high-knowledge product vs. low-knowledge product) had a significant impact on average revenue (in €), as well as price-perceptions. Nevertheless, horizontal PPO on its own had no significant impact on average revenue (in €). CONCLUSION. Participants were willing to spend significantly more money when the combination of horizontal PPO and star-ratings created a positive price-quality relationship (descending PPO x descending star-ratings; ascending PPO x ascending star-ratings). The quality of products is also seen more positively when star-ratings are present and when horizontally descending PPO is used. Low-knowledge products are perceived to be more expensive and average revenue (in €) is lower when low-knowledge products are displayed. Nevertheless, horizontal PPO alone does not seem to significantly influence average revenue (in €) in online web-shop environments.
Item Type:Essay (Master)
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/74066
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