Does effective cost transparency increase price fairness? An analysis of apparel brand strategies

Sojin Jung, Hyeon Jeong Cho () and Byoungho Ellie Jin
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Sojin Jung: Kyung Hee University
Hyeon Jeong Cho: Southeast Missouri State University
Byoungho Ellie Jin: Kyung Hee University

Journal of Brand Management, 2020, vol. 27, issue 5, No 1, 495-507

Abstract: Abstract Built on reference dependence, this study investigated how the framing of cost information affects perceived gains and losses, and tested the mediating roles of gain and loss perceptions in the relationship between cost information and price fairness, which in turn, increase buying intentions toward the apparel brand. A between-subjects study was designed to test the hypotheses and our sample consisted of a total of 804 U.S. participants who responded to our online survey. The results showed that disclosing the true cost and markup of a product along with its retail price was a more effective way to increase the perceived gain of buying and also the loss of not buying the product than when only the retail price was presented. Differently framed cost information triggered price fairness and buying intentions only through gain perceptions, but not through loss perceptions. The results of this research demonstrate the power of cost transparency using reference points for effective apparel brand strategies. Theoretical and practical implications were also discussed.

Keywords: Apparel brand strategy; Cost transparency; Reference point; Perceived gains and losses; Price fairness (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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DOI: 10.1057/s41262-020-00191-w

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