Consumer response to unit pricing for mobile telephony

This project is a co-operative study between ACCAN and Deakin University. It focuses on Unit Pricing, the practice of displaying the price of goods or services based on a standard quantity, to allow a direct comparison between competitive offers. This study aimed at gauging whether the new unit pricing information for mobile phone contracts assists consumers in assessing and comparing the value provided across alternative contracts within and between suppliers. Some 24 in-depth interviews were conducted with consumers who had recently bought or renewed a mobile phone contract.
The research showed that most consumers could use unit pricing information and some found it useful. Where consumers’ plans had unlimited or infinite capacity, unit pricing information was not relevant. Many consumers preferred voice allowances to be expressed in minutes, rather than in dollar allowances. Data was the most problematic category, as consumers typically had only limited understanding of the amount of data that various applications used. Most did have a broad understanding of what total capacity in data they would need, typically expressed in gigabytes.
Consumers commonly sought simplicity in deciding on which plan they would purchase or renew. A key issue for consumers was not “going over”, that is not exceeding their call, text or data allowances. For that reason, they were prepared to choose a plan that commonly resulted in them not using their full allowances each month. Some consumers used Apps on their smartphones to monitor their usage. Not all consumers had experienced advisory messages about nearing the limits of their plan’s allowances.
The Report recommended that:

R1. Unit pricing should be maintained
R2. Where unit pricing is provided for call costs, these should be expressed in terms of a one-minute call.
R3 Unit pricing for data should be expressed in terms of gigabytes or part thereof.
R4 In advertising mobile phone plans and at point of sales, customers should be provided with three levels of information – 1) overall plan features, 2) unit pricing information and 3) a data calculator.
R5 Level 2 and 3 information should be provided in a standard format across the industry, enabling consumers to make ready comparisons between plans and between competitive offers from different providers.
R6. Continuing public education is needed.
R7. Warnings about going over should always include the date when the allowance period ends and tell consumers what the rate will be if they “go over” based on the Level 2 information.
R8. The Consumer Protection Code should be reviewed in the light of these findings and recommendations.

Consumer price knowledge in the market for apparel

Purpose – The aim of this study is to analyze consumers' price knowledge in the market for apparels. Design/methodology/approach – After reviewing earlier attempts at assessing the construct, the price estimation error “PEE” was used, a measure based on explicit price knowledge stored in long-term memory, as a valid indicator of price knowledge. Findings – The results, including data from about 1,527 consumers on 66 products from the German apparel market, indicate that price knowledge is relatively low. Originality/value – Although, in the literature, there are several studies on price knowledge in the food industry, little is known about price knowledge in other industry sectors. This is quite surprising since pricing strategy is a concept which is vitally important to all retailers. Therefore, this study is a first contribution to extending the concept of behavioral pricing to the apparel market.

Usage-Based versus Measure-Based Unit Pricing: Is There a Better Index of Value?

In many product categories, unit prices facilitate price comparisons across brands and package sizes; this enables consumers to identify those products that provide the greatest value. However in other product categories, unit prices may be confusing. This is because there are two types of unit pricing, measure-based and usage-based. Measure-based unit prices are what the name implies; price is expressed in cents or dollars per unit of measure (e.g. ounce). Usage-based unit prices, on the other hand, are expressed in terms of cents or dollars per use (e.g., wash load or serving). The results of this study show that in two different product categories (i.e., laundry detergent and dry breakfast cereal), measure-based unit prices reduced consumers’ ability to identify higher value products, but when a usage-based unit price was provided, their ability to identify product value was increased. When provided with both a measure-based and a usage-based unit price, respondents did not perform as well as when they were provided only a usage-based unit price, additional evidence that the measure-based unit price hindered consumers’ comparisons. Finally, the presence of two potential moderators, education about the meaning of the two measures and having to rank order the options in the choice set in terms of value before choosing, did not eliminate these effects.

Risk, trust, and consumer online purchasing behaviour : a Chilean perspective

Purpose: The purpose of this study is to investigate Latin American online purchase behaviour with a specific focus on the influence of perceived risk and trust. While studies of this nature have been conducted quite extensively in developed countries, their application in developing countries, such as Latin America is limited. Our study addresses this gap in the literature with an empirical study conducted in Chile. Design/methodology/approach: The authors develop and test a proposed model of the influence of consumer’s perceptions of risk and trust on their attitudes and intentions to purchase on the Internet. An online survey method is used. The sample consists of 176 Chilean consumers who have made at least one purchase online. The data is analysed using structural equation modelling technique (SEM). Findings: The analysis revealed that of the perceived risk and trust factors examined, trust in third party assurances and a cultural environment of trust had the strongest positive influence on intentions to continuing purchasing online. Perceived risk had an inverse relationship with attitude and consumers’ attitude has a positive influence on intentions to purchase online. Trust in online vendors and a propensity to trust were both insignificant. Practical implications: Practically, these results identity which risk and trust beliefs towards purchasing online have the most effect thereby providing insights into how companies should seek to mitigate perceptions of risk to encourage new and return purchasers. Additionally, this research shows that consumers in a Latin American country, recognised as a collectivist, high risk avoidance culture, are willing to make purchases online despite the risks involved. Originality/value: The study and its results is one of few available that consider a Latin American context. The value of the findings provides insights into the specific risk and trust factors that influence Chilean consumers when considering purchasing online. The tested model adds value not only to the literature on Latin American consumer behaviour but also provides guidance for companies offering online retailing facilities in these less developed countries.

The effect of consumer education on unit price usage : an early exploratory study

Consumer awareness and usage of Unit Price (UP) information continues to hold academic interest. Originally designed as a device to enable shoppers to make comparisons between grocery products, it is argued consumers still lack a sufficient understanding of the device. Previous research has tended to focus on product choice, effect of time, and structural changes to price presentation. No studies have tested the effect of UP consumer education on grocery shopping expenditure. Supported by distributed learning theories, this is the first study to condition participants over a twenty week period, to comprehend and employ UP information while shopping. A 3x5 mixed factorial design was employed to collect data from 357 shoppers. A 3 (Control, Massed, Spaced) x 5 (Time Point: Week 0, 5, 10, 15 and 20) mixed factorial analysis of variance (ANOVA) was performed to analyse the data. Preliminary results revealed that the three groups differed in their average expenditure over the twenty weeks. The Control group remained stable across the five time points. Results indicated that both intensive (Massed) and less intensive (Spaced) exposure to UP information achieved similar results, with both group reducing average expenditure similarly by Week 5. These patterns held for twenty weeks, with conditioned groups reducing their grocery expenditure by over 10%. This research has academic value as a test of applied learning theories. We argue, retailers can attain considerable market advantages as efforts to enhance customers’ knowledge, through consumer education campaigns, can have a positive and strong impact on customer trust and goodwill toward the organisation. Hence, major practical implications for both regulators and retailers exist.

Antecedents of consumer brand loyalty in the Australian wine industry

The wine industry has become fiercely competitive worldwide and as a result, consumers are increasingly exposed to a wider range of wines in retail outlets. This expanding consumer choice means that there is a need for Australian wineries to develop and build consumer loyalty toward their brands. This paper aims to empirically examine the factors influencing consumer loyalty to wine brands. Using data from Australian wine consumers, the authors empirically test a model of antecedents of wine brand loyalty. The model considers wine brand trust, wine brand satisfaction, wine knowledge, and wine experience. Hypotheses were tested with structural equation modeling. The findings of this study show that wine knowledge and wine experience affect wine brand loyalty indirectly through wine brand trust and wine brand satisfaction. In addition, it is demonstrated that consumer satisfaction with a wine brand is the strongest driver of wine brand loyalty. The result of this study has value for Australian wineries, wine retailers, and wine marketers.

The Value of Financial Planning Advice: Process and Outcome Effects on Consumer Well-being [Time 1 and 2 Survey Summary Results]

While anecdotal evidence indicates financial advice affects consumers’ financial well-being, this research project is motivated by the absence of empirically-grounded research relating to the extent to which, and, importantly, how, financial planning advice contributes to broader client well-being. Accordingly, the aim of this project is to establish how the quality of financial planning advice can be optimised to add value, not only to clients’ financial situation, but also to broader aspects of their well-being. This broader construct of well-being captures a range of process and outcome factors that map to concepts of security, control, choice, mastery, and life satisfaction (Irving, 2012; Gallery, Gallery, Irving & Newton, 2011; Irving, Gallery, and Gallery, 2009). Financial planning is commonly purported to confer not only tangible benefits, but also intangible benefits, such as increased security and peace of mind that are considered as important, if not more important, than material outcomes. Such claims are intuitively appealing; however, little empirical evidence exists for the notion that engaging with a financial planner or adviser promotes peace of mind, feelings of security, and expands choices and possibilities. Nor is there evidence signalling what mechanisms might underpin such client benefits. In addressing this issue, we examine the financial planning advice (including financial product advice) provided to retail clients, and consider the short- and longer-term impacts on clients’ financial satisfaction and broader well-being. To this end, we examine both process (e.g., how financial planning advice is given) and outcome (e.g., financial situation) effects.

Defective co-creation: Developing a typology of consumer dysfunction in professional services

Purpose This study aims to explore the scope of consumers’ defective co-creation behaviour in professional service encounters. One of the founding premises of service-dominant logic (Vargo and Lusch, 2004, 2008) is that consumers co-create the value they derive from service encounters. In practice, however, dysfunctional consumer behaviour can obstruct value co-creation. Extant research has not yet investigated consumers’ defective co-creation behaviour in highly relational services, such as professional services, that are heavily reliant on co-creation. Design/methodology/approach To investigate defective co-creation in professional services, 164 critical incidents were collected from 38 health-care and financial service providers using the critical incident technique within semi-structured, in-depth interviews. Thematic coding was used to identify emergent themes and patterns of consumer behaviour. Findings Thematic coding resulted in a comprehensive typology of consumers’ defective co-creation behaviour that both confirms the prevalence of previously identified dysfunctional behaviours (e.g. verbal abuse and physical aggression) and identifies two new forms of consumer misbehaviour: underparticipation and overparticipation. Further, these behaviours can vary, escalate and co-occur during service encounters. Originality/value Both underparticipation and overparticipation are newly identified forms of defective co-creation that need to be examined within the broader framework of service-dominant logic (SDL).

IT pricing: Copyright law, consumer rights, and competition policy. A submission to the House of Representatives Standing Committee on Infrastructure and Communications Inquiry into IT Pricing

For a hundred years, since Federation, Australian consumers have suffered the indignity and the tragedy of price discrimination. From the time of imperial publishing networks, Australia has been suffered from cultural colonialism. In respect of pricing of copyright works, Australian consumers have been gouged; ripped-off; and exploited. Digital technologies have not necessarily brought an end to such price discrimination. Australian consumers have been locked out by technological protection measures; subject to surveillance, privacy intrusions and security breaches; locked into walled gardens by digital rights management systems; and geo-blocked.

The Value of Being on the Net- the effects of Web sites of companies on consumer decision making

The unique characteristics of marketspace in combination with the fast growing number of consumers interested in e-commerce have created new research areas of interest to both marketing and consumer behaviour researchers. Consumer behaviour researchers interested in the decision making processes of consumers have two new sets of questions to answer. The first set of questions is related to how useful theories developed for a marketplace are in a marketspace context. Cyber auctions, Internet communities and the possibilities for consumers to establish dialogues not only with companies but also with other consumers make marketspace unique. The effects of these distinctive characteristics on the behaviour of consumers have not been systematically analysed and therefore constitute the second set of questions which have to be studied. Most companies feel that they have to be online even though the effects of being on the Net are not unambiguously positive. The relevance of the relationship marketing paradigm in a marketspace context have to be studied. The relationship enhancement effects of websites from the customers’ point of view are therefore emphasized in this research paper. Representatives of the Net-generation were analysed and the results show that companies should develop marketspace strategies while Net presence has a value-added effect on consumers. The results indicate that the decision making processes of the consumers are also changing as a result of the progress of marketspace

Reliability models for existing structures based on dynamic state estimation and data based asymptotic extreme value analysis

The problem of time variant reliability analysis of existing structures subjected to stationary random dynamic excitations is considered. The study assumes that samples of dynamic response of the structure, under the action of external excitations, have been measured at a set of sparse points on the structure. The utilization of these measurements m in updating reliability models, postulated prior to making any measurements, is considered. This is achieved by using dynamic state estimation methods which combine results from Markov process theory and Bayes' theorem. The uncertainties present in measurements as well as in the postulated model for the structural behaviour are accounted for. The samples of external excitations are taken to emanate from known stochastic models and allowance is made for ability (or lack of it) to measure the applied excitations. The future reliability of the structure is modeled using expected structural response conditioned on all the measurements made. This expected response is shown to have a time varying mean and a random component that can be treated as being weakly stationary. For linear systems, an approximate analytical solution for the problem of reliability model updating is obtained by combining theories of discrete Kalman filter and level crossing statistics. For the case of nonlinear systems, the problem is tackled by combining particle filtering strategies with data based extreme value analysis. In all these studies, the governing stochastic differential equations are discretized using the strong forms of Ito-Taylor's discretization schemes. The possibility of using conditional simulation strategies, when applied external actions are measured, is also considered. The proposed procedures are exemplifiedmby considering the reliability analysis of a few low-dimensional dynamical systems based on synthetically generated measurement data. The performance of the procedures developed is also assessed based on a limited amount of pertinent Monte Carlo simulations. (C) 2010 Elsevier Ltd. All rights reserved.

Consumer Expertise or Credit Risk? An empirical analysis of mortgage pricing

Loan mortgage interest rates are usually the result of a bank-customer negotiation process. Credit risk, consumer cross-buying potential, bundling, financial market competition and other features affecting the bargaining power of the parties could affect price. We argue that, since mortgage loan is a complex product, consumer expertise could be a relevant factor for mortgage pricing. Using data on mortgage loan prices for a sample of 1055 households for the year 2005 (Bank of Spain Survey of Household Finances, EFF-2005), and including credit risk, costs, potential capacity of the consumer to generate future business and bank competition variables, the regression results indicate that consumer expertise-related metrics are highly significant as predictors of mortgage loan prices. Other factors such as credit risk and consumer cross-buying potential do not have such a significant impact on mortgage prices. Our empirical results are affected by the credit conditions prior to the financial crisis and could shed some light on this issue.

Consumption pattern and consumer preference for value-added fish and fish products in north zone of India

Present paper attempts to analyze consumption pattern and consumer preferences towards value-added fish and fish products in north zone of India. Results reveal that socio economic variables affect consumption of value-added fish and fish products. A total of 49 percent respondents were of middle age group (35 to 50 years). All were literates except 7% from the rural area. All were purchasing fish at least once in 15 days. A total of 90% respondents in rural, 11% in semi urban and 50% in urban area were unaware of value-added fish and fish products. About 10% of respondents had consumed it, out of which most were from urban area. Demand analysis by Cobb Douglas (CD) Demand function revealed that when price of fish, price of the substitutes, income of family and family size were used as independent variables, variation in demand of fish explained by CD Demand function was about 39% in urban area, 24% in semi urban area and 22% in rural area. From Garette ranking technique major problems in fish consumption found were irregular supply, lack of fresh fish, high price and presence of bones in fish. While lack of awareness, unavailability, no preference and unacceptable taste were major problems for consumption of value-added fish and fish products.