The influence of price fairness on customer satisfaction: an empirical test in the context of automobile purchases
| Published date | 06 March 2007 |
| Pages | 49-58 |
| DOI | https://doi.org/10.1108/10610420710731151 |
| Date | 06 March 2007 |
| Author | Andreas Herrmann,Lan Xia,Kent B. Monroe,Frank Huber |
| Subject Matter | Marketing |
Pricing strategy & practice
The influence of price fairness on customer
satisfaction: an empirical test in the context of
automobile purchases
Andreas Herrmann
University of St Gallen, St Gallen, Switzerland
Lan Xia
Marketing Department, Bentley College, Waltham, Massachusetts, USA
Kent B. Monroe
University of Illinois and University of Richmond, Glen Allen, Virginia, USA, and
Frank Huber
University of Mainz, Mainz, Germany
Abstract
Purpose – This paper aims to link conceptually the concepts of price fairness and customer satisfaction and empirically demonstrate the influence of
perceived price fairness on satisfaction judgments. Further, it seeks to examine specific factors that influence fairness perceptions including price
perception and consumer vulnerability.
Design/methodology/approach – The study is conducted in the context of automobile purchases in major German car dealerships. Based on a
theoretical conceptualization of the constructs and an empirical pretest, 246 car buyers were surveyed and their fairness perceptions and satisfaction
judgments with the car buying process measured.
Findings – The research shows that price perceptions directly influence satisfaction judgments as well as indirectly through perceptions of price
fairness. Results also indicated that consumers’ vulnerability,which is induced by a perceived demand-supply relationship and the urgency of need from
the consumers’ side, had a negative effect on perceived price offer fairness.
Research limitations/implications – The research demonstrated the influence of perceived price fairness on satisfaction judgments empirically. The
study was conducted in the context of car purchases and the generalizability of the model should be further tested.
Practical implications – The effect of consumer vulnerability implies that sellers should not only avoid exploiting their customers but should also
anticipate consumers’ potential feelings of being exploited. Being sensitive to the buyers’ psychological state and assuring buyers of fair treatment will
enhance perceptions of price fairness without changing the price offer.
Originality/value – Both the direct and indirect effects of price perception on satisfaction judgment were examined in the paper. Specifically, the
influences of consumer vulnerability and price procedure fairness on satisfaction judgments are new and contribute to the dual-entitlement principle
and our existing knowledge in price fairness.
Keywords Fair value, Customer satisfaction, Prices, Perception
Paper type Research paper
Previous research on customer satisfaction has examined
factors that enhance customer satisfaction in various contexts
(for recent reviews see, Oliver, 1997; Szymanski and Henard,
2001; Shankar et al., 2003). As an important factor in the
marketing mix, the role of product or service price in the
formation of customer satisfaction has not been studied
extensively in previous customer satisfaction research (Voss
et al., 1998). When price has been included, it has been one of
several product attributes considered relevant (Fornell et al.,
1996; Voss et al., 1998); however, the unique influence of
product price on satisfaction judgments remains unclear. In
this research we include consumers’ price perceptions as an
important factor influencing overall satisfaction judgments.
This influence is both direct, and indirect via price fairness
perceptions.
Voss et al. (1998) argue that satisfaction is a function of
price, performance and expectations with support for the
expectations-satisfaction link being weak. They propose that,
in contrast to performance, perceived price fairness might be
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
16/1 (2007) 49–58
qEmerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610420710731151]
49
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