One firm, one product, two prices: Channel-based price differentiation and customer retention

Julia Vogel and Michael Paul

Journal of Retailing and Consumer Services, 2015, vol. 27, issue C, 126-139

Abstract: Every multichannel retailer must decide whether and how to apply channel-based price differentiation. This study identifies channel-related price differentiation instruments and considers their effects on customer retention. It empirically tests hypotheses using a laboratory experiment and analytically investigates feasibility conditions. Results show that channel-based price differentiation positively affects customers through perceived value but harms retention through price unfairness and limited self-determination. The mobile communications retailer in this study would require 5.1% lower operating costs online to ensure its profitability. These results indicate that multichannel retailers with channel-based price differentiation should carefully select their price instruments and meet the feasibility conditions.

Keywords: Multichannel management; Price differentiation; Mobile communications services (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:27:y:2015:i:c:p:126-139

DOI: 10.1016/j.jretconser.2015.07.007

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