Quantity surcharge, competition and package size: evidence from India

Dhruv Goel, Anushka Goyal and Ishaan Sand
Additional contact information
Anushka Goyal: Delhi University
Ishaan Sand: Indian Institute of Management Rohtak

Journal of Revenue and Pricing Management, 2024, vol. 23, issue 5, No 7, 452-460

Abstract: Abstract We investigate the influence of market competition heterogeneity across package sizes on a firm’s pricing strategy. We focus on the transition from quantity discounts (common practice) to quantity surcharges (charging more for larger packages) and hypothesise that firms adopt surcharges when competition is significantly higher in the smaller-package market. Using a survey of 38 grocery stores, we find that the adoption of surcharges rises alongside substantial disparities in competition between sizes, as measured by brand availability. We posit that varying demand elasticities between pack sizes, driven by heterogeneous consumer preferences, may underpin this competition divergence and subsequent pricing strategy shifts. Our findings contribute to the understanding of pricing dynamics under asymmetric competition and offer insights for firms navigating competitive landscapes across product formats.

Keywords: Price discrimination; Market competition; Quantity surcharge; Package size; Consumer heterogeneity; Demand elasticity (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1057/s41272-024-00482-w Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:jorapm:v:23:y:2024:i:5:d:10.1057_s41272-024-00482-w

Ordering information: This journal article can be ordered from
https://www.palgrave.com/gp/journal/41272

DOI: 10.1057/s41272-024-00482-w

Access Statistics for this article

Journal of Revenue and Pricing Management is currently edited by Ian Yeoman

More articles in Journal of Revenue and Pricing Management from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().