To gather data about consumer pricing sentiment the researchers conduct six lab experiments in which participants answer questions about a simulat website of a fashion retailer selling T shirts. The research also includ a field study of sales figures at a real online retailer to look at how spelling out a firm s variable costs of production could affect consumer purchase havior. The researchers found When a firm voluntarily discloses its costs the consumer is more attract to the brand which increases willingness to buy.
There s this lay intuition that
When customers find out that a company is making a profit off of them they might get upset John says. But that s not necessarily the case. Consumers enmesh in Portugal Email Lists private longstanding relationships with the brand were just as likely as newcomers to respond favorably to cost transparency. Cost transparency nefits weaken as a company s profit margins grow larger relative to costs. Interestingly a company that exposes costs still sees a decent level of purchase intent even with a fairly high price markup. We want to understand when cost transparency would harmful Buell says. With a T shirt that cost . to produce it seem reasonable to us that cost transparency would helpful in motivating buyers if the price of the shirt was .
Even at we still saw an advantage to revealing
The cost of production which is interesting cause the markup was five times the cost. when prices come so high that they are way out of whack with the Canada Phone Number market norm—and when the firm makes it clear that its own markup is much higher than what competitors charge. For instance if a company charges for a T shirt but emphasizes that competitors are charging only that their costs are the same and that the competitor s markup is lower the consumer comes less attract to the higher pric brand and less willing to buy the brand s products.
