Presenting the Perceived Fairness Model of Dynamic Pricing: Meta-Synthesis Approach

Document Type : Research Paper

Authors

1 Prof., Department of Business Management, Faculty of Social Sciences and Economics, Al-Zahra University, Tehran, Iran.

2 Associate Prof., Department of Human Resource Management, Faculty of Management, College oF Farabi, University of Tehran, Qom, Iran.

3 Ph.D. Candidate, Department of Business Management, Faculty of Social Sciences and Economics, Al-Zahra University, Tehran, Iran.

Abstract

Objective
The lack of perceived fairness in pricing can lead to various negative consequences, including diminished trust in the seller and the prices, reduced demand, lower customer satisfaction, negative word-of-mouth advertising, loss of customer loyalty to the company or brand, increased complaints, and a reluctance to make future purchases. Considering all the mentioned destructive consequences, it is necessary to design a perceived fairness model for dynamic pricing. Accordingly, this study to present the perceived fairness model of dynamic pricing using a meta-synthesis approach.
 
Methodology
This research is descriptive in terms of its practical purpose, data collection, and qualitative approach. The method used in this study is qualitative. Meta-synthesis involves several steps: searching, evaluating, synthesizing, expressing, and partially interpreting both quantitative and qualitative research. Transcombination can be performed using various methods; in this study, the 7-step model of Sandelowski and Barso was employed. The data collection tool consisted of past documents, including 32 articles. Content analysis was used as the method for data analysis.
 
Findings
The findings indicated the drivers affecting the perceived fairness of dynamic pricing in three categories: customer-related factors (demographic characteristics, price knowledge, price expectation, consumption and behavioral experience, familiarity with dynamic pricing), company-related factors (pricing transparency, communication with customers, trust), and market-related factors (price position, price dispersion). These drivers are the set of factors that affect the perceived fairness of dynamic pricing. The drivers include various factors. Perceived fairness of dynamic pricing includes two dimensions: emotional fairness and cognitive fairness. Customers who expect low prices will be suspicious and unfair about price increases. The actions taken by companies to raise customer awareness about the reasons for price increases, the timing of price changes, and similar actions in past periods significantly influence customers' accurate understanding of the price changes, preventing them from perceiving them as unfair. Perceived fairness consequences of dynamic pricing are categorized into two categories: positive consequences (customer satisfaction, customer loyalty, repurchase intention) and negative consequences (negative feelings, negative behaviors, and negative advertising by customers).
 
Conclusion
Any price difference should be based on a logical reason and serve as a tool for segmentation. While pricing policies inevitably influence consumers' purchase intentions, they should not undermine the perceived fairness from the customer's perspective. The identified drivers of perceived fairness in dynamic pricing, when applied to pricing the same goods under different conditions, provide a foundation for pricing decision-makers within companies.

Keywords

Main Subjects

References

 
Alderighi, M., Nava, C. R., Calabrese, M., Christille, J. M. & Salvemini, C. B. (2022). Consumer perception of price fairness and dynamic pricing: Evidence from Booking. com. Journal of Business Research, 145, 769-783.
Ali, L., Yee, W. F., Imm, N. S. & Akhtar, M. S. (2018). Price fairness, guest emotions, satisfaction, and behavioral intentions in peer to peer accommodation sector. Journal of Global Business Insights, 3(2), 41-51.
Alzoubi, H., Alshurideh, M., Kurdi, B. & Inairat, M. J. U. S. C. M. (2020). Do perceived service value, quality, price fairness and service recovery shape customer satisfaction and delight? A practical study in the service telecommunication context. Uncertain Supply Chain Management, 8(3), 579-588.
Andrés‐Martínez, M. E., Gómez‐Borja, M. Á. & Mondéjar‐Jiménez, J. A. (2013). A review of the price fairness perception concept. Academia Revista Latinoamericana de Administración, 26(2), 318-342.
Anton, R., Chenavaz, R. Y. & Paraschiv, C. (2023). Dynamic pricing, reference price, and price-quality relationship. Journal of Economic Dynamics and Control, 146, 104586.
Ayadi, N., Paraschiv, C. & Rousset, X. (2017). Online dynamic pricing and consumer-perceived ethicality: Synthesis and future research. Recherche et Applications en Marketing (English Edition), 32(3), 49-70.
Bakhshi Zadeh Borj, K., Binai Rad, M. & Salehian Fard, R. (2022). The effect of dynamic pricing strategy on customer satisfaction with service recovery through perceived justice in internet taxi platforms (case study: Snap intelligent transportation system). Business strategies, 19(19), 107-128. (in Persian)
Chung, J. Y. & Petrick, J. F. (2015). Measuring price fairness: Development of a multidimensional scale. Journal of travel & tourism marketing, 32(7), 907-922.
Diao, W., Harutyunyan, M. & Jiang, B. (2023). Consumer fairness concerns and dynamic pricing in a channel. Marketing Science, 42(3), 569-588.
Diaz, C., Avella, A., Vera, J.R. & Neubert, M. (2022). Factors impacting consumer's fairness perception in a dynamic pricing context: a systematic literature review. International Journal of Teaching and Case Studies, 13(3), 181-206.
El Haddad, R., Hallak, R. & Assaker, G. (2015). Price fairness perceptions and hotel customers’ behavioral intentions. Journal of Vacation Marketing, 21(3), 262-276.
Ferguson, J.L. & Scholder Ellen, P. (2013). Transparency in pricing and its effect on perceived price fairness. Journal of Product & Brand Management, 22(5/6), 404-412.
Finfgeld-Connett, D. (2018). A guide to qualitative meta-synthesis. Routledge.
Friesen, M. (2020). A dynamic perspective on consumers’ price fairness perception: Empirical evidence from the airline industry. Die Unternehmung, 74(4), 403-425.
Heo, C. Y. & Lee, S. (2011). Influences of consumer characteristics on fairness perceptions of revenue management pricing in the hotel industry. International Journal of Hospitality Management, 30(2), 243-251.
Hride, F. T., Ferdousi, F. & Jasimuddin, S. M. (2022). Linking perceived price fairness, customer satisfaction, trust, and loyalty: A structural equation modeling of Facebook‐based e‐commerce in Bangladesh. Global Business and Organizational Excellence, 41(3), 41-54.
Jiang, L. & Erdem, M. (2018). Effects of revenue management pricing strategies on perceived fairness. Journal of hospitality marketing & management, 27(4), 424-442.
Kool, S., Westerlaken, R. & Suleri, J. (2022). Dynamic pricing and perceived fairness: a case study at a hotel on the West Frisian island of Vlieland, The Netherlands. Research in Hospitality Management, 12(2), 143-150.
Lee, S., Illia, A. & Lawson‐Body, A. (2011). Perceived price fairness of dynamic pricing. Industrial Management & Data Systems, 111(4), 531-550.
Lu, Z., Bolton, L. E., Ng, S. & Chen, H. A. (2020). The price of power: How firm’s market power affects perceived fairness of price increases. Journal of Retailing, 96(2), 220-234.
Malc, D., Mumel, D. & Pisnik, A. (2016). Exploring price fairness perceptions and their influence on consumer behavior. Journal of Business Research, 69(9), 3693-3697.
Mayser, S. & von Wangenheim, F. (2013). Perceived fairness of differential customer treatment: Consumers’ understanding of distributive justice really matters. Journal of Service Research, 16(1), 99-113.
Meatchi, S., Camus, S. & Lecointre-Erickson, D. (2021). Perceived unfairness of revenue management pricing: developing a measurement scale in the context of hospitality. International Journal of Contemporary Hospitality Management, 33(10), 3157-3176.
Munn, Z., Porritt, K., Lockwood, C., Aromataris, E. & Pearson, A. (2014). Establishing confidence in the output of qualitative research synthesis: the ConQual approach. BMC medical research methodology, 14(1), 1-7.
Nazari, M. & Ashkani, M. (2015). Investigation antecedents and consequences of price fairness based on attritional theory. New Marketing Research Journal, 5(2), 109-125. (in Persian)
Nazari, M. & Fathi, H. (2019). Effect of price difference, social hierarchy and indigenous social norm on fair price perception; analyzing on role of financing source. Consumer Behavior Studies Journal, 6(1), 1-19. (in Persian)
Nazari, M. & Samizadeh, M. (2019). Evaluation of Customers’ Perceived Fairness of Dynamic Pricing and Its Effective Factors in Hotel Industry. New Marketing Research Journal, 8(3), 19-40. (in Persian)
Nazari, M., Ashkani, M. & Hazaveh Hesar Maskan, B. (2015). The Impact of Perceived Price Fairness on Loyalty, Willingness to Pay, Complain and Revenge Intention of Customers (Case Study: Internet Services Industry). Journal Of Business Management, 7(4), 967-984. (in Persian)
Nazari, M., Heidary, A., Haghighinasab, M. & Samizadeh, M. (2018). Meta-analysis of Influencing Factors on Perception of Fairness in Dynamic Pricing. Journal Of Business Management, 10(1), 229-252. (in Persian)
Neubert, M. (2022). A systematic literature review of dynamic pricing strategies. International Business Research, 15(4), 1-17.
Nye, E., Melendez‐Torres, G. J. & Bonell, C. (2016). Origins, methods and advances in qualitative meta‐synthesis. Review of Education, 4(1), 57-79.
Radic, D. (2023). Price fairness: square equity and mean pricing. Journal of Revenue and Pricing Management, 1-7.
Sabri, O., Djedidi, A. & Hani, M. (2021). When does coopetition affect price unfairness perception? The roles of market structure and innovation. Journal of Business & Industrial Marketing, 36(2), 209-229.
Sandelowski, M. & Barroso, J. (2006). Handbook for synthesizing qualitative research. springer publishing company.
Selove, M. (2019). Dynamic pricing with fairness concerns and a capacity constraint. Quantitative Marketing and Economics, 17(4), 385-413.
Severt, K., Shin, Y. H., Chen, H. S. & DiPietro, R. B. (2022). Measuring the relationships between corporate social responsibility, perceived quality, price fairness, satisfaction, and conative loyalty in the context of local food restaurants. International Journal of Hospitality & Tourism Administration, 23(3), 623-645.
Singh, G., Slack, N. J., Sharma, S., Aiyub, A. S. & Ferraris, A. (2022). Antecedents and consequences of fast-food restaurant customers' perception of price fairness. British Food Journal, 124(8), 2591-2609.
Tang, J., Repetti, T. & Raab, C. (2019). Perceived fairness of revenue management practices in casual and fine-dining restaurants. Journal of Hospitality and Tourism Insights, 2(1), 92-108.
Tarrahi, F., Eisend, M. & Dost, F. (2016). A meta-analysis of price change fairness perceptions. International Journal of Research in Marketing, 33(1), 199-203.
Victor, V., Joy Thoppan, J., Jeyakumar Nathan, R. & Farkas Maria, F. (2018). Factors influencing consumer behavior and prospective purchase decisions in a dynamic pricing environment—an exploratory factor analysis approach. Social Sciences, 7(9), 153.
Zaki, K. (2022). Implementing dynamic revenue management in hotels during Covid-19: value stream and wavelet coherence perspectives. International Journal of Contemporary Hospitality Management, 34(5), 1768-1795.
Journal of Business Management
Volume 17, Issue 1
2025
Pages 129-148

Files

Share

How to cite

Statistics