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How do consumers react to price reduction of innovative products? An empirical investigation of price fairness perceptions of past purchase

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  • Waheed Kareem Abdul

    (Dubai International Academic City)

Abstract

This study focuses on consumers’ price fairness perception of past purchase (PFPoPP) in situations of price reduction of innovative consumer durables. The proposed model of the study includes perceived firm innovativeness (PFI), perceived loss of uniqueness (PLU) and customer justification for price reduction (CJ) as antecedents to PFPoPP and, brand loyalty (BL) and positive word of mouth (PWoM) as outcomes. A survey was conducted among 202 consumers who own a smartphone and the data were analysed using partial least squares structural equations modelling (PLS-SEM). The findings suggest that PFI and CJ positively associate with PFPoPP and PLU negatively associates with PFPoPP. Furthermore, the findings also suggest that PFPoPP positively associates with BL and PWoM. The study contributes to the price fairness perceptions research from a post-purchase perspective and implies that the firms in innovative consumer durable industry need to identify appropriate conditions for price reduction.

Suggested Citation

  • Waheed Kareem Abdul, 2018. "How do consumers react to price reduction of innovative products? An empirical investigation of price fairness perceptions of past purchase," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 17(4), pages 276-290, August.
    • Handle: RePEc:pal:jorapm:v:17:y:2018:i:4:d:10.1057_s41272-017-0116-y
    DOI: 10.1057/s41272-017-0116-y
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