IDEAS home Printed from https://ideas.repec.org/a/eee/jaitra/v75y2019icp85-91.html
   My bibliography  Save this article

Lowest price guarantees on airline websites: Perceived believability, perceived value, and purchase intentions

Author

Listed:
  • Jeng, Shih-Ping
  • Lo, Min-Fang

Abstract

Although lowest price guarantees (LPGs) are common on airlines’ official websites, a deeper understanding of how customers evaluate these guarantees is lacking. This study examines the effects of two LPG terms—depth of refund and refund conditions—on customer perceptions and purchase intention. An experiment with a 2 × 2 factorial design was conducted with a sample of 282 adults, and structural equation modelling was used to test the model. The results show that refund depth increases customer purchase intention by enhancing perceptions of the believability and value of the LPG. Strict refund conditions enhance customer purchase intention by increasing the believability of the LPGs.

Suggested Citation

  • Jeng, Shih-Ping & Lo, Min-Fang, 2019. "Lowest price guarantees on airline websites: Perceived believability, perceived value, and purchase intentions," Journal of Air Transport Management, Elsevier, vol. 75(C), pages 85-91.
    • Handle: RePEc:eee:jaitra:v:75:y:2019:i:c:p:85-91
    DOI: 10.1016/j.jairtraman.2018.12.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969699717305392
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jairtraman.2018.12.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Escobar-Rodríguez, Tomás & Carvajal-Trujillo, Elena, 2013. "Online drivers of consumer purchase of website airline tickets," Journal of Air Transport Management, Elsevier, vol. 32(C), pages 58-64.
    2. Arbatskaya, Maria & Hviid, Morten & Shaffer, Greg, 2004. "On the Incidence and Variety of Low-Price Guarantees," Journal of Law and Economics, University of Chicago Press, vol. 47(1), pages 307-332, April.
    3. Ruiz-Mafé, Carla & Sanz-Blas, Silvia & Aldás-Manzano, Joaquín, 2009. "Drivers and barriers to online airline ticket purchasing," Journal of Air Transport Management, Elsevier, vol. 15(6), pages 294-298.
    4. Jeng, Shih-Ping, 2016. "The influences of airline brand credibility on consumer purchase intentions," Journal of Air Transport Management, Elsevier, vol. 55(C), pages 1-8.
    5. Forgas, Santiago & Palau, Ramon & Sánchez, Javier & Huertas-García, Rubén, 2012. "Online drivers and offline influences related to loyalty to airline websites," Journal of Air Transport Management, Elsevier, vol. 18(1), pages 43-46.
    6. Forsythe, Sandra M. & Shi, Bo, 2003. "Consumer patronage and risk perceptions in Internet shopping," Journal of Business Research, Elsevier, vol. 56(11), pages 867-875, November.
    7. Suwelack, Thomas & Hogreve, Jens & Hoyer, Wayne D., 2011. "Understanding Money-Back Guarantees: Cognitive, Affective, and Behavioral Outcomes," Journal of Retailing, Elsevier, vol. 87(4), pages 462-478.
    8. Kukar-Kinney, Monika, 2006. "The role of price-matching characteristics in influencing store loyalty," Journal of Business Research, Elsevier, vol. 59(4), pages 475-482, April.
    9. Michael Spence, 2002. "Signaling in Retrospect and the Informational Structure of Markets," American Economic Review, American Economic Association, vol. 92(3), pages 434-459, June.
    10. Mohamed Saber Chtourou & Jean-Louis Chandon & Monique Zollinger, 2002. "Effect of Price Information and Promotion on Click-Through Rates for Internet Banners," Post-Print hal-01796045, HAL.
    11. de Boer, Evert R. & Gudmundsson, Sveinn Vidar, 2012. "30 years of frequent flyer programs," Journal of Air Transport Management, Elsevier, vol. 24(C), pages 18-24.
    12. Crespo-Almendros, E. & Del Barrio-García, S., 2016. "Online airline ticket purchasing: Influence of online sales promotion type and Internet experience," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 23-34.
    13. Park, Jin-Woo, 2010. "The effect of frequent flyer programs: A case study of the Korean airline industry," Journal of Air Transport Management, Elsevier, vol. 16(5), pages 287-288.
    14. Srivastava, Joydeep & Lurie, Nicholas, 2001. "A Consumer Perspective on Price-Matching Refund Policies: Effect on Price Perceptions and Search Behavior," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 28(2), pages 296-307, September.
    15. Adilson Borges & Barry Babin, 2012. "Revisiting low price guarantees: Does consumer versus retailer governance matter?," Marketing Letters, Springer, vol. 23(3), pages 777-791, September.
    16. Llach, Josep & Marimon, Frederic & Alonso-Almeida, María del Mar & Bernardo, Merce, 2013. "Determinants of online booking loyalties for the purchasing of airline tickets," Tourism Management, Elsevier, vol. 35(C), pages 23-31.
    17. Wang, Stephen W. & Kao, Grace Hsiu-Ying & Ngamsiriudom, Waros, 2017. "Consumers' attitude of endorser credibility, brand and intention with respect to celebrity endorsement of the airline sector," Journal of Air Transport Management, Elsevier, vol. 60(C), pages 10-17.
    18. Wang, Stephen W. & Hsu, Maxwell K., 2016. "Airline co-branded credit cards—An application of the theory of planned behavior," Journal of Air Transport Management, Elsevier, vol. 55(C), pages 245-254.
    19. Chang, Li-Yen & Hung, Shao-Chih, 2013. "Adoption and loyalty toward low cost carriers: The case of Taipei–Singapore passengers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 50(C), pages 29-36.
    20. Pierre Desmet & Emmanuelle Le Nagard, 2005. "Differential Effects of Price-beating Versus Price-matching Guarantee on Retailers' Price Image," Post-Print halshs-00143377, HAL.
    21. Roggeveen, Anne L. & Goodstein, Ronald C. & Grewal, Dhruv, 2014. "Improving the Effect of Guarantees: The Role of a Retailer's Reputation," Journal of Retailing, Elsevier, vol. 90(1), pages 27-39.
    22. repec:dau:papers:123456789/2333 is not listed on IDEAS
    23. Shimp, Terence A & Bearden, William O, 1982. "Warranty and Other Extrinsic Cue Effects on Consumers' Risk Perceptions," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 9(1), pages 38-46, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. San-Martín, Sonia & Jiménez, Nadia & Liébana-Cabanillas, Francisco, 2020. "Tourism value VS barriers to booking trips online," Journal of Retailing and Consumer Services, Elsevier, vol. 53(C).
    2. Kumar, Aman & Shankar, Amit & Behl, Abhishek & Arya, Varsha & Gupta, Nakul, 2023. "Should I share it? Factors influencing fake news-sharing behaviour: A behavioural reasoning theory perspective," Technological Forecasting and Social Change, Elsevier, vol. 193(C).
    3. Dong, Qingxing & Xiong, Siyue & Zhang, Mengyi, 2024. "Remedial behavior for misinformation: A moderated mediation model of remedial attitude and perceived consequence severity," Technology in Society, Elsevier, vol. 77(C).
    4. Tan, Wee-Kheng & Wang, Wei-Jie, 2021. "The application of information values and construal level theory for examining low cost carrier advertisements," Journal of Air Transport Management, Elsevier, vol. 90(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Crespo-Almendros, E. & Del Barrio-García, S., 2016. "Online airline ticket purchasing: Influence of online sales promotion type and Internet experience," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 23-34.
    2. Desmet, Pierre & Le Nagard, Emmanuelle & Vinzi, Vincenzo Esposito, 2012. "Refund depth effects on the impact of price-beating guarantees," Journal of Business Research, Elsevier, vol. 65(5), pages 603-608.
    3. Rokonuzzaman, Md & Iyer, Pramod & Harun, Ahasan, 2021. "Return policy, No joke: An investigation into the impact of a retailer's return policy on consumers' decision making," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    4. Castillo-Manzano, José I. & López-Valpuesta, Lourdes, 2014. "Living “up in the air†: Meeting the frequent flyer passenger," Journal of Air Transport Management, Elsevier, vol. 40(C), pages 48-55.
    5. Adilson Borges & Barry Babin, 2012. "Revisiting low price guarantees: Does consumer versus retailer governance matter?," Marketing Letters, Springer, vol. 23(3), pages 777-791, September.
    6. Haruvy, Ernan & Popkowski Leszczyc, Peter T.L., 2016. "Measuring the Impact of Price Guarantees on Bidding in Consumer Online Auctions," Journal of Retailing, Elsevier, vol. 92(1), pages 96-108.
    7. Morten Hviid & Greg Shaffer, 2012. "Optimal low-price guarantees with anchoring," Quantitative Marketing and Economics (QME), Springer, vol. 10(4), pages 393-417, December.
    8. Wenyan Zhou & Oliver Hinz & Alexander Benlian, 2018. "The impact of the package opening process on product returns," Business Research, Springer;German Academic Association for Business Research, vol. 11(2), pages 279-308, September.
    9. Shu Wang & Ying-Kai Liao & Wann-Yih Wu & Khanh Bao Ho Le, 2021. "The Role of Corporate Social Responsibility Perceptions in Brand Equity, Brand Credibility, Brand Reputation, and Purchase Intentions," Sustainability, MDPI, vol. 13(21), pages 1-19, October.
    10. Wang, Stephen W. & Hsu, Maxwell K., 2016. "Airline co-branded credit cards—An application of the theory of planned behavior," Journal of Air Transport Management, Elsevier, vol. 55(C), pages 245-254.
    11. Dutta, Sujay & Bhowmick, Sandeep, 2009. "Consumer responses to offline and online low price signals: The role of cognitive elaboration," Journal of Business Research, Elsevier, vol. 62(6), pages 629-635, June.
    12. Cohen-Vernik, Dinah & Pazgal, Amit, 2017. "Price Adjustment Policy with Partial Refunds," Journal of Retailing, Elsevier, vol. 93(4), pages 507-526.
    13. Loy, Jens-Peter & Ceynowa, Christian & Kuhn, Lena, 2020. "Price recall: Brand and store type differences," Journal of Retailing and Consumer Services, Elsevier, vol. 53(C).
    14. Falk, Tomas & Kunz, Werner H. & Schepers, Jeroen J.L. & Mrozek, Alexander J., 2016. "How mobile payment influences the overall store price image," Journal of Business Research, Elsevier, vol. 69(7), pages 2417-2423.
    15. Dutta, Sujay, 2012. "Vulnerability to Low-Price Signals: An Experimental Study of the Effectiveness of Genuine and Deceptive Signals," Journal of Retailing, Elsevier, vol. 88(1), pages 156-167.
    16. Wirawan Dony Dahana & HeeJae Shin & Sotaro Katsumata, 2018. "Influence of individual characteristics on whether and how much consumers engage in showrooming behavior," Electronic Commerce Research, Springer, vol. 18(4), pages 665-692, December.
    17. Lin, Hsin-Hui & Tseng, Timmy H. & Yeh, Ching-Hsuan & Liao, Yi-Wen & Wang, Yi-Shun, 2020. "What drives customers’ post-purchase price search intention in the context of online price matching guarantees," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    18. Desmet, Pierre, 2014. "How retailer money-back guarantees influence consumer preferences for retailer versus national brands," Journal of Business Research, Elsevier, vol. 67(9), pages 1971-1978.
    19. Teresa Garín-Muñoz & Teodosio Pérez-Amaral & Rafael López, 2020. "Consumer engagement in e-Tourism: Micro-panel data models for the case of Spain," Tourism Economics, , vol. 26(6), pages 853-872, September.
    20. Xu, Xun & Jackson, Jonathan E., 2019. "Investigating the influential factors of return channel loyalty in omni-channel retailing," International Journal of Production Economics, Elsevier, vol. 216(C), pages 118-132.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jaitra:v:75:y:2019:i:c:p:85-91. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/journal-of-air-transport-management/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.