An Insight into Pay-what-you-want Pricing
MetadataShow full item record
Purpose: Extant literature on pricing posits that consumers’ internal reference price (IRP) drives willingness to pay (WTP), when external pricing cues are available. This positive IRP–WTP relationship is further moderated by involvement and price consciousness. The current research was designed to test how the IRP–WTP relationship will be moderated by involvement and price consciousness, albeit in the pay-what-you-want (PWYW) context. In the PWYW setting consumers can pay any amount of money (including nothing) and no external pricing cues are provided. Design/methodology/approach: A survey was engaged to measure the key variables, and the data was analysed using hierarchical multiple regression with spotlight analyses. Findings: In the normal everyday pricing context, involvement strengthens the IRP–WTP relationship, while price consciousness weakens it. Contrary to this normal pricing wisdom, in the PWYW context, it was found that both involvement and price consciousness weaken the IRP–WTP relationship, thereby driving down consumers’ WTP. Research limitations/implications: Future studies should use experimental design to manipulate some of the independent variables used in the study, focus on the mediating processes that underlie PWYW decision-making and extend the findings in the context of wider demographics. Practical implications: Managers should focus on segmentation, branding and product experiences to ensure higher returns of PWYW businesses. Originality/value: This paper addresses lack of overall research in the PWYW area, and also addresses some key gaps left by extant research of Kim, Natter and Spann (2009) that was published in the Journal of Marketing.
This article is © Emerald Group Publishing and permission has been granted for this version to appear here - <a href="http://espace.library.curtin.edu.au:80/R?func=dbin-jump-full&local_base=gen01-era02&object_id=213002">http://espace.library.curtin.edu.au:80/R?func=dbin-jump-full&local_base=gen01-era02&object_id=213002</a> Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited.
Showing items related by title, author, creator and subject.
Roy, R.; Rabbanee, Fazlul (2016)Pay What You Want (PWYW) is a type of participative pricing mechanism where the buyer can offer any price including a price of zero; and the seller has to accept the price without withdrawing the product offer. Although ...
Antecedents, outcomes, and mediating role of internal reference prices in pay-what-you-want (PWYW) pricingRoy, Rajat; Rabbanee, Fazlul; Sharma, Piyush (2015)Purpose – The purpose of this paper is to explore the mediating role of internal reference price (IRP) in a pay-what-you-want (PWYW) price setting. Specifically, it examines the effects of altruism, social desirability ...
Exploring the interactions among external reference price, social visibility and purchase motivation in pay-what-you-want pricingRoy, Rajat; Rabbanee, Fazlul; Sharma, Piyush (2015)Purpose: The purpose of this paper is to investigate the direct and indirect effects of social visibility (private vs public), purchase motivation (intrinsic vs extrinsic vs altruistic) and external reference price (ERP) ...