Price negotiating for services: elucidating the ambivalent effects on customers’ negotiation aspirations

Sascha Alavi (), Johannes Habel (), Marco Schwenke () and Christian Schmitz ()
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Sascha Alavi: University of Bochum
Johannes Habel: The University of Warwick
Marco Schwenke: University of Applied Sciences Europe
Christian Schmitz: University of Bochum

Journal of the Academy of Marketing Science, 2020, vol. 48, issue 2, No 2, 165-185

Abstract: Abstract Although customers frequently negotiate the prices of both goods and services, academic research has mostly examined negotiations in goods contexts, neglecting the fact that negotiations for services may be different. This study examines the consequences of customers’ price negotiation behavior relating to services as compared to goods. Using five empirical studies with field and experimental data, the authors show that services exert ambivalent effects. First, the heterogeneity intrinsic to services leads customers to aspire to better negotiation outcomes because customers perceive higher risk and regard negotiation as more legitimate, particularly if services are customized. Second, the inseparability of services leads customers to lower their negotiation aspirations because they fear negative consequences, particularly if customers are closely integrated in the service process. Building on these findings, the authors conceptualize and test communication strategies that diminish customers’ negotiation aspirations. Study results provide actionable recommendations for managers and salespeople in service industries.

Keywords: Price negotiations; Personal selling; Goods versus services; Heterogeneity; Inseparability (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s11747-019-00676-4

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