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The Role of Hedonic and Utilitarian Motives on the Effectiveness of Partitioned Pricing

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SSCI Scopus ABDC-A*

Abstract

The present research investigates how purchase motives (hedonic vs. utilitarian) influence the effectiveness of partitioned versus combined pricing. Across four studies, we find that compared to combined pricing, partitioned pricing increases hedonic purchases, but not utilitarian purchases. We find this happens because consumers considering a hedonic purchase tend to feel anticipated guilt associated with their hedonic spending, and partitioned pricing is used as a guilt-mitigating justification for the spending. Specifically, consumers with a hedonic purchase motive underprocess a surcharge, which enables them to perceive the price of the product as lower than the actual, combined price. This lower price perception helps consumers justify their hedonic purchase as an act of saving money, and as a result, alleviates guilt. These effects are magnified among consumers who have high disposition to feel consumption guilt. When a price discount is offered, it attenuates the effectiveness of partitioned pricing because the price discount serves as a more effective justification by offering actual saving, not just the perception of saving. Our findings contribute to the pricing literature by uncovering a motivational factor influencing the effectiveness of partitioned (vs. combined) pricing, and offer a useful pricing guideline to product managers based on the product-pricing fit revealed in our research. (C) 2019 New York University. Published by Elsevier Inc. All rights reserved.

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[Choi, Jungsil] Cleveland State Univ, 2121 Euclid Ave, Cleveland, OH 44115 USA

[Madhavaram, Sreedhar R.] Texas Tech Univ, Lubbock, TX 79409 USA

[Park, Hyun Young] China Europe Int Business Sch CEIBS, Shanghai, Peoples R China


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Source

Journal of Retailing

ISSN:0022-4359

Year:2020

Issue:2

Volume:96

Page:251-265

ESI Discipline:ECONOMICS & BUSINESS;

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