Divide Tariffs and Prosper? A Focus on the Role of Need for Cognition

Marketing ZFP, 37 (2), 102-110

Posted: 18 Aug 2015

See all articles by Sven Feurer

Sven Feurer

Karlsruhe Institute of Technology (KIT), Institute of Information Systems and Marketing (IISM)

Monika Schuhmacher

Justus-Liebig-University Gießen, Department of Technology, Innovation, and Start-up Management

Sabine Kuester

University of Mannheim, Department of Marketing & Innovation

Date Written: August 17, 2015

Abstract

This study presents a conceptual replication of the effect of partitioned prices on consumer responses in a subscription service setting. Contrasting Morwitz/Greenleaf/Johnson’s (1998) seminal article, the results of an online experiment reveal that consumers are more likely to buy a subscription service with a partitioned tariff (i.e., a pay-per-use tariff) than with a combined tariff (i.e., a flat rate). This effect occurs even though all consumers are aware of the correct billing price and the billing price is identical in both conditions. However, the negative effect of the partitioned (vs. the combined) tariff on consumer responses is mitigated by high levels of need for cognition. Intriguingly, consumers extremely high in need for cognition show a reversed effect pattern when examining perceived price fairness as the dependent variable, that is, they perceive the partitioned tariff to be fairer than the combined tariff.

Suggested Citation

Feurer, Sven and Schuhmacher, Monika and Kuester, Sabine, Divide Tariffs and Prosper? A Focus on the Role of Need for Cognition (August 17, 2015). Marketing ZFP, 37 (2), 102-110, Available at SSRN: https://ssrn.com/abstract=2645595

Sven Feurer

Karlsruhe Institute of Technology (KIT), Institute of Information Systems and Marketing (IISM) ( email )

Karlsruhe, 76131
Germany

Monika Schuhmacher

Justus-Liebig-University Gießen, Department of Technology, Innovation, and Start-up Management ( email )

Licher Str. 62
Gießen, 35394
Germany

Sabine Kuester (Contact Author)

University of Mannheim, Department of Marketing & Innovation ( email )

Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
404
PlumX Metrics