Quantity consumer goods pricing: has yesterday's surcharge become today's discount?. Issue 7 (21st November 2016)

• Record Type: Journal Article
• Authors: Dunphy, Steve
• Is Part Of: Journal of product & brand management. Volume 25:Issue 7(2016)
• Page Start: 721
• Page End: 728
• Publication Date: 2016-11-21
• Subjects: Retailing -- Consumer behaviour -- Pricing strategy -- Consumer goods; New products -- Management -- Periodicals; New products -- Marketing -- Periodicals; Branding (Marketing) -- Periodicals; Advertising -- Brand name products -- Periodicals; 658.8
• DOI: 10.1108/JPBM-02-2016-1101
• Languages: English
• ISSNs: 1061-0421

Abstract

Abstract : Purpose: This study aims to extend by way of replication an earlier study, "Blind man's bluff: The ethics of quantity surcharges" (Gupta and Rominger, 1996) by testing several hypotheses regarding changes in the surcharging phenomenon that may have occurred over time. Design/methodology/approach: The original study was constructed from data collected 20 years ago. This study went beyond a mere replication. A key difference between this study and the original study was in the method of data collection. In the earlier study, students were used to collect data. In this study, the author personally and carefully recorded the prices of the same 60 items that were noted in the original study. These new prices were then compared with the original ones. Several matched paired t -tests were administered to analyze the mean differences between the two sets of data. Findings: The tests showed a highly significant difference in today's pricing structure in comparison to the quantity surcharging phenomenon from the prior study. It was found that both the quantity of the items surcharged and the magnitude of the surcharges decreased in comparison to the surcharging reported in the original study. Research limitations/implications: Reasons are given regarding what changed and why and suggestions are given for future research in the areas of private or in-store branding, the proliferation of "big box" stores and the changes in the frequency and magnitude of surcharging that may be occurring over time. Originality/value: This study indicates that the quantity surcharging phenomenon has lessened. In fact, in mature markets which include big box discounters, the quantity surcharging phenomenon of 20 years ago may have given way to today's quantity discount.