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The effects of participative pricing on consumers

Participation is central to successful consumerism. It's the subtle and neighborly haggling over a rusty mailbox at a garage sale, throwing one's hand in the air at an auction, offering and counter-offering for a house, and the newest incarnation of the centuries old practice of negotiating price: the Internet. An article in the September 2005 issue of the Journal of Consumer Research demonstrates that a consumer's mindset can play a profound role in participatory pricing.

"Demonstrating the subtle yet powerful role mindsets play in dictating thought and action is a unique contribution of this research," assert Sucharita Chandran (Boston University) and Vicki Morwitz (New York University). "Our framework posits that the nature of the pricing environment and the individual's perceived control over shopping situations interact to determine a goal-related purchase focus--whether the focus is on deliberating the purchase goal (why purchase), or on implementing the purchase goal (how to purchase). In turn, this goal-related purchase focus influences cognitions and purchase likelihood."

Of particular note regarding the study, however, is its contribution to not only the theoretical world of consumer research, but also the more pragmatic applications it offers for practitioners.

Chandran and Morwitz argue, "Our results suggest that if marketers can measure personal characteristics such as perceived control either by a survey or through personal interaction, it is possible to tailor offerings to match the needs of different kinds of consumers."

Source: Eurekalert & others

Last reviewed: By John M. Grohol, Psy.D. on 21 Feb 2009
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