Managing Customer Price Perceptions

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E-tailing services excellence has become a powerful source of competitive differentiation within diverse marketing offerings of e-tailers. Although researchers have suggested that e-tailing service competencies complement marketing efforts, empirical evidence is lacking on what service quality means to customers and whether it has impact on marketing outcome variables as consumer price perceptions and customer share. This paper conducts empirical analyses for related e-tailing service quality constructs, and demonstrates their effects on consumer price perceptions. It is also found that the time of establishing an online presence plays a role in affecting customers' perception of price, which suggests that customers generally have favorable price perceptions at early entrants. The number of customers who bought a product and evaluated the e-tailer's site (used as a proxy of customer share) is the major differentiating variable of e-tailers; however, no significant difference in e-tailing service excellence as expected has been found between the e-tailer clusters with large customer share and those with small customer share. This finding indicates that excellence on service is not necessarily an advantage that allows e-tailers to command large customer share, as suggested by Smith et al. (2000). In fact, these e-tailers might charge higher prices through providing good performance in service because of customers having favorable price perceptions. And these e-tailers may maintain the good image by continuously charging high prices.




This article is the authors' final published version in Services Marketing Quarterly, Volume 24, Issue 4, 2003, Pages 77-98.

The published version is available at https://doi.org/10.1300/J396v24n04_05. Copyright © Informa UK Limited