Title page for ETD etd-06082004-141808


Type of Document Dissertation
Author Burman, Bidisha
Author's Email Address bburma1@lsu.edu
URN etd-06082004-141808
Title Partitioned Pricing: Can We Always Divide and Prosper?
Degree Doctor of Philosophy (Ph.D.)
Department Marketing (Business Administration)
Advisory Committee
Advisor Name Title
Abhijit Biswas Committee Chair
Danny Weathers Committee Member
Ronald W. Niedrich Committee Member
William C. Black Committee Member
Xigen Li Committee Member
Wes Harrison Dean's Representative
Keywords
  • reasonableness of surcharge
  • need for cognition
  • partitioned pricing
  • characterization-correction model
  • cue diagnosticity
Date of Defense 2004-05-18
Availability unrestricted
Abstract
Research on partitioned pricing suggests that separating the surcharges from the base price of the advertised product may lead to a more favorable effect on consumers' evaluation of the offer compared to a combined presentation of the base price and the surcharge. In this dissertation we propose that partitioned price presentation may not always result in positive outcomes vis--vis combined presentation of prices. We propose that consumers' need for cognition and the perceived reasonableness of the surcharge are likely to influence their evaluation of partitioned versus combined prices. Based on cue diagnosticity, Persuasion Knowledge Model, and Characterization-Correction Model we develop process models of how consumers with differing need for cognitions evaluate partitioned and combined price information under reasonable and unreasonable surcharge conditions. The proposed hypotheses are tested across three studies, each consisting of two experiments. The three studies use different products and services and manipulate perceived reasonableness of surcharges in three different ways. The results of the first two studies provide support for the proposed hypotheses. The third study was designed to replicate the findings of the first two studies, examine the process models as well as measure the respondents' attitude toward the retailer under reasonable and unreasonable surcharge conditions. The results show strong support for the hypotheses and demonstrate that for high need for cognition individuals partitioned pricing leads to a higher perception of value of the offer and a higher willingness to purchase compared to combined pricing when the surcharges are perceived to be reasonable. These effects of partitioned pricing are completely reversed for high need for cognition individuals when the surcharge is perceived to be unreasonable. Low need for cognition individuals did not respond differently to the two pricing strategies.
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