Perceived Fairness In Marketing

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Perceived fairness can be interpreted as judgment of whether the result and/ or process are reasonable and acceptable (Bolton et al., 2003). The perceived fairness involves the comparison of price and procedure with a relative standard, reference or norm (Xia et al., 2004). Similarly, perceived value is the customers’ overall assessment of the utility of a product based on perceptions of what is received and what is given (Zeithaml, 1988) and perceived value can be measured by the quality that the customers received for the price paid (Heo et al., 2013). Studies of perceived fairness were conducted for different industries (Thaler, 1985; Kahneman et al., 1986a; Urbany et al., 1989; Kaufmann et al., 1991; Kimes 1994; Campbell 1999a, 1999b;…show more content…
Rate fences allow customer to segment themselves based on their willingness to pay, their behaviour and their needs (Hanks et al., 1992). It helps the restaurants to justify why different people pay different prices. In restaurant business, rate fences include table location, table with scenic view and time of meals (Kimes and Wirtz, 2002; Kimes and Wirtz, 2003; Susskind et al., 2004). All the rate fences can be framed as either gain or loss to customers. Studies suggested that customers always treat discount pricing as fairer than those surcharges (Chen, Monroe and Lou, 1998; Kimes and Wirtz, 2002, 2003; Wirtz and Kimes,…show more content…
Wirtz and Kimes (2007) suggested to enhance the familiarity by using brochures, signage and employee explanations of price differentials. They also commented that customers are familiar with the revenue management strategies in airline and hotel industry. It may take a shorter period of time for customers to get familiar with the revenue management strategies adopted in restaurant industry. Choi and Mattila (2005) also emphasized the significance of communicating with customers in regards to the pricing policy they have adopted. When customers are familiar with the pricing strategies used by restaurants, they are more likely to accept the demand-based pricing and consider the pricing as fair. Although the perceived fairness of revenue management practice can be moderated in hotel industry (Choi and Mattila, 2004; 2005; 2006), Lee and Fenich (2016) reveal that information available on the pricing procedure has little effect on the perceived fairness in meeting, convention, and exhibition

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