Влияние маркетинговых стимулов на потребителя

The analysis revealed that even when consumers are able to detect the product downsizing, they tend to err in their judgments regarding the price change and underestimate the scope of price increase. That could be driven by the limited abilities to conduct valid mathematical calculations when both the nominator and denominator (that is, product size and total package price) change. Even in the absence of product downsizing, consumers did not provide a valid evaluation of price change scope, and product downsizing being a more mentally challenging way to frame a price change accelerates the tendency to make mistakes among consumers. Based on such metal limitations, covert (vs overt) unit price increase is proved to lead to a more positive consumer response in the short term when consumers have no access to external information and can rely only on their internal knowledge on covert pricing tactics usage.

In the long term, when consumers have access to external information on covert pricing tactics usage, the effect of covert (vs overt) pricing tactics tends to become less favorable for companies. The long-term effect is moderated by the source of consumer knowledge on pricing covert tactics usage: consumers who managed to internally invoke the knowledge on pricing tactics usage react differently to covert unit price increase in the long term than those whose knowledge on pricing tactics usage was externally invoked.

The narrow scope of the study in terms of analyzed sample and product categories being a limitation for the generalization of results becomes an alarm for future research with more broad and representative empirical data.

Литература

1. Aaker, J., Fournier, S., & Brasel, S.A. (2004). When good brands do bad. Journal of Consumer research, 31 (1), 1-16.

2. Ajzen, I. (1991). The theory of planned behavior. Organizational behavior and human decision processes, 50 (2), 179-211.

3. Bearden, W.O., Hardesty, D.M., & Rose, R.L. (2001). Consumer self?confidence: refinements in conceptualization and measurement. Journal of Consumer Research, 28 (1), 121-134.

4. Bolton, L.E., Warlop, L. and Alba, J. (2003). Consumer perceptions of price (un) fairness. Journal of Consumer Research, 29 (4), 474-492.

5. Cakir, M., Balagtas, J.V., & Okrent, A.M. (2013). The Effects of Package Downsizing on Food Consumption. In 2013 Annual Meeting, August 4-6, 2013, Washington, DC (No. 150680). Agricultural and Applied Economics Association.

6. Carlson, J.P., Bearden, W.O., & Hardesty, D.M. (2007). Influences on what consumers know and what they think they know regarding marketer pricing tactics. Psychology & Marketing, 24 (2), 117-142.

7. Doney, P.M. and J.P. Cannon (1997). An examination of the nature of trust in buyer-seller relationships. Journal of Marketing, 61, April, 35-51.

8. Friestad, M., & Wright, P. (1994). The persuasion knowledge model: How people cope with persuasion attempts. Journal of consumer research, 1-31.

9. Garbarino, E. and Maxwell, S. (2010). Consumer response to norm-breaking pricing events in e-commerce. Journal of Business Research, 63 (9), 1066-1072.

10. Gourville, J.T., & Koehler, J.J. (2004). Downsizing price increases: A greater sensitivity to price than quantity in consumer markets. Division of Research, Harvard Business School.

11. Hardesty, D.M., Bearden, W.O., & Carlson, J.P. (2007). Persuasion knowledge and consumer reactions to pricing tactics. Journal of Retailing, 83 (2), 199-210.

12. Haws, K.L. and Bearden, W.O. (2006). Dynamic pricing and consumer fairness perceptions. Journal of Consumer Research, 33 (3), 304-311.

13. Imai, S., & Watanabe, T. (2014). Product downsizing and hidden price increases: Evidence from Japan's deflationary period. Asian Economic Policy Review, 9 (1), 69-89.

14. Kachersky, L. (2011). Reduce Content or Raise Price? The Impact of Persuasion Knowledge and Unit Price Increase Tactics on Retailer and Product Brand Attitudes. Journal of Retailing, 87 (4), 479-488.

15. Manning, K.C., Sprott, D.E. and Miyazaki, A.D. (1998), «Consumer response to quantity surcharges: implications for retail price setters», Journal of Retailing, Vol. 74 No. 3, pp. 373-99.

16. McGraw, A.P., & Tetlock, P. (2005). Taboo trade-offs, relational framing, and the acceptability of exchanges. Journal of Consumer Psychology, 15 (1), 2-15.

17. Morgan, R.M. and S.D. Hunt (1994). The commitment-trust theory of relationship marketing, Journal of Marketing, 58, July, 20-38.

18. Olshavsky, R.W., & Miller, J.A. (1972). Consumer expectations, product performance, and perceived product quality. Journal of marketing research, 19-21.

19. Reichheld, F.F. and P. Schefter (2000). E-Loyalty: Your secret weapon on the web, Harvard Business Review, 78, 105-113.

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21. Xia, L., Monroe, K.B. and Cox, J.L. (2004). The price is unfair! A conceptual framework of price fairness perceptions. Journal of Marketing, 68 (October), 1-15.

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Приложение 1

Апробация результатов исследования на XVI Апрельской международная научная конференция «Модернизация экономики и общества», 7-10 апреля 2015 года, Москва, Россия

Consumer Response To Misleading Pricing Tactics: The Case Of Product Downsizing

Author: Kseniia S. Golovacheva, PhD Student (e-mail: golovacheva_k@mail.ru)

Contact: Graduate School of Management, Saint Petersburg State University, Volkhovsky Pereulok 3, St. Petersburg, Russia

Introduction

The academic literature reports multiple cases of marketing practices that are perceived by consumers as unfair or deceptive: unclear advertising claims, ambiguous packaging labels, hidden costs associated with the product usage (Zaltman, 1978). Consumers face these practices at all stages of their buying process. The examples in the field of pricing especially abound.

Price increases are a widespread phenomenon in a variety of markets. Such increases can be driven by market factors or by a desire of the company to increase profit margins. Regardless of the purpose of price increases, consumers usually negatively react to them as they has a detrimental effect on their wellbeing. Under the unfavorable economic circumstances, when consumer behavior is characterized by the accelerating rationalization, economizing and the weakening of brand loyalty, the consumer response to price increases can be extremely harsh. To mitigate the negative consumer response to a price increase, companies can manage the way a price increase is presented to the market. Instead of raising the price for a product, the company can decrease the quantity/size of a product and remain the price of the product item unchanged. On the one hand, it allows keeping the product available for consumers; on the other hand, it makes hard to compare prices directly, which could be potentially perceived by consumers as unfair or deceptive (Zaltman, 1978; Hardesty, Bearden, Carlson, 2007).

The motivation of marketers behind using pricing tactics that can mislead consumer from making an optimal choice is the possibility to get additional benefits. Marketers may not necessarily be trying to deceive consumers, but they are often affected nonetheless (Manning et al. 1998; Sprott et al. 2003). When describing their lives as consumers, people point out «the confusing, stressful, insensitive, and manipulative marketplace in which they feel trapped and victimized» (Fournier, Dobscha, & Mick, 1998). Similarly McGraw and Tetlock (2005) reason: «Consumers who have been gulled into thinking of themselves as part of a corporate family or partnership may feel especially bitter when they discover that the other party was treating them along purely as objects of monetary calculation». Thus, misleading marketing practices once successfully implemented can become a source of consumer dissatisfaction over time, as consumers learn and develop their marketing expertise together with marketers. Getting financial benefits at the expense of consumers' welfare due to consumer's inattention or limited knowledge in something can bring significant losses to the company, once consumers gain persuasion knowledge in the field.

The questions the study intends to answer are the following: How do consumers respond to price increases framed in a misleading vs «honest» way? Do misleading pricing tactics really allow marketers to get additional gains as compared to «honest» tactics? Does the effect of such practices differ among consumers possessing different levels of market knowledge?

Theoretical Background

The Framing of Price Increases: Product Downsizing vs Overt Price Increase

The price and its impact on consumers has always been a focal point in the economic and management disciplines. The schools of economic thought united under the aegis of neoclassical economics put the price on one of the central places in their research agenda. They focus on how price changes affect consumer demand for a good, but avoid scrutinizing the underlying psychological processes that lead the consumer to a buying or rejecting decision. Rather, neoclassical economics regards the consumer as a rational agent who is capable to make a precise and unbiased decision to maximize his own wellbeing. The blooming of positive economics armed with the psychological methods expands the narrow neoclassical focus. The consumer is not viewed as a purely rational agent anymore. Indeed, positive economics directs its research efforts towards revealing the real consumer behavior and the circumstances under which the predictions of neoclassical economics fail.

In particular, traditional economic models treat price as the monetary sacrifice a consumer makes to acquire a product or service (Stigler, 1987) and assume that an individual should make the same choice when faced with equivalent decision problems. Although these principles have been usefully applied to a variety of marketing problems, recent research on the psychological aspects of pricing suggests that the role of price might be more complex than anticipated by standard economic principles. In particular, a number of studies demonstrated that the way price information is presented, termed price framing (Tversky and Kahneman, 1981), often significantly influences perceptions of value.

The nature of framing appears to differentially affect consumer perceptions of deals that are equivalent on a unit-cost basis but worded or presented differently (Sinha, Smith, 2000).

In the field of pricing research, different frames of the equivalent price deals were compared: multiple vs single price changes (Mazumdar, Jun, 1993; Tsiros, Hardesty, 2013), absolute vs percentage price change formats (DelVecchio, Krishnan, Smith, 2007), product price vs product size changes (Chen, Marmorstein, Tsiros, Rao, 2013; Gourville, Koehler, 2004; Kachersky, 2011), all-inclusive vs partitioned price presentations (Bambauer, Gierl, 2008), etc.

The frames of product price vs product size changes to present an equivalent unit-cost change has received their attention in the studies of both price decreases (often for promotional purposes) and price increases. Nevertheless, while the examination of promotion types started relatively earlier and generated more research because of their popularity in the marketplace, the opposite problem has relatively recently entered the scholarly domain. The framing of price increases as an overt price change or less visible for the consumer products downsizing (i.e. reducing the volume of product per package without a proportional decrease in package price) leads to different consumer responses to changes that are equivalent on the unit-price basis.

In a range of articles that compare the consumer demand sensitivity to an equivalent price increase and product downsizing, it is demonstrated that consumers are more sensitive to price over quantity/size changes because of either their unawareness of product size, inattention to unit prices, or relative uncommonness of product downsizing in the marketplace (Gourville, Koehler, 2004; Cakir, Balagtas, 2014). However, some studies does not prove that the differential sensitivity to differently framed price increases exists (Imai, Watanabe, 2014).

Presumably, the difference in the response to overt and covert price increase framings can be found not only at the level of behavioral achievements, but also at the level of consumer perceptions of alternatives. Numerous studies have shown that consumers' acceptance of a price, particularly a price increase, depends on considering it «fair» (Kahneman, Knetsch, Thaler, 1986). Packaging, size, or feature differences that make it hard to compare prices directly could be potentially perceived by consumers as unfair or deceptive (Zaltman, 1978).

Price fairness judgments involve a comparison of a price or procedure with a pertinent standard, reference, or norm (Xia, Monroe, Cox, 2004). In case of pricing, the overt raise of price per product could be regarded as such a fair standard, because such a way to increase price is clear and does not demand additional cognitive costs to evaluate the extent of price increase. On the contrary, product downsizing can be regarded by consumers as a manipulative intent of the company to mislead consumers from an optimal choice and thereby gain from consumer limited attention or unawareness.

Misleading Pricing Tactics as Persuasion Attempts

Pricing tactics include marketers' efforts to generate favorable price perceptions regarding their brands, stores, and offerings (Hardesty, Bearden, Carlson, 2007). Marketers use a variety of tactics to attract customers and persuade them to buy the product. Some pricing practices mislead consumers leading to a suboptimal choice. For instance, quantity surcharges implies that unit price of a product packaged in a larger quantity is higher than the unit price of the same product and brand packaged in a smaller quantity, which is contrary to a widespread consumer belief that the unit price of goods packaged in larger quantities is less (Palla, Boutsouki, Zotos, 2010). Obviously, when consumers rely on their beliefs about pricing practice that contradict the actual pricing practice, they burden themselves with additional financial load and decrease their wellbeing.

When faced with the practice in routine life the consumer can be unaware of practice usage. The understanding of practice nature can be gained with experience. Consumers are more likely to accurately learn about the persuasive intent behind pricing tactics upon greater exposure to them in the marketplace (Carlson, Bearden, Hardesty, 2007). «Over time consumers develop personal knowledge about the tactics used in these persuasion attempts» (Friestad, Wright, 1994). Friestad and Wright (1994) introduced the Persuasion Knowledge Model (PKM) that describes how people's persuasion knowledge influences their responses to persuasion attempts, in particular, how people use their persuasion knowledge to refine their attitudes toward products and marketers. Persuasion knowledge guides consumers' attention to aspects of an advertising campaign or price presentation, providing inferences about possible background conditions that caused the agent to construct the attempt in that way (Friestad, Wright, 1994). When choosing a pricing tactic, producers are per se trying to find a persuading pricing message that will appeal to consumers in a better way. It considers the marketer to be the agent of persuasion, the consumer to be the target of persuasion, and the pricing tactic to reflect the persuasion attempt. Pricing tactic persuasion knowledge (PTPK) represents a form of domain-specific knowledge gained through experience (Hardesty, Bearden, Carlson, 2007).

Marketing-literate consumers and those who are not armed with enough marketing knowledge and experience react differently to tactics employed by marketers. After conducting a series of experiments (Hardesty, Bearden, Carlson, 2007) identified that less knowledgeable consumers are more susceptible to such marketing practices as quantity surcharges and tensile claim offers and to making suboptimal decisions. (Kachersky, 2011) investigates consumer reactions to the practice of increasing unit prices of products by either reducing product content or increasing total prices. According to results, higher levels of PTPK lead consumers to infer different motives behind the two types of unit price increases, with content reductions being attributed to firm motives to increase profit margins and total price increases being attributed to firm motives to maintain profit margins in the face of situational factors such as cost inflation. Second, higher levels of PTPK lead consumers to look less favorably on product brands when the product content is reduced compared to when the total price is increased, and that this outcome is driven by inferred motives. Third, in contrast to high PTPK consumers, lower levels of PTPK lead consumers to alter their evaluations not of the product brand but of the retailer.

Hypotheses Development

The problem of product downsizing was raised in a limited number of articles that address the issue of product downsizing impact on consumer demand and compare the demand sensitivity to equivalent price increase and product downsizing (Gourville, Koehler, 2004; Cakir, Balagtas, 2013; Snir, Levy, 2011; Imai, Watanabe, 2014). The results of the studies are contradictory and demand further clarification, in particular, by introducing moderating variables that allow interpreting the differences in the above studies. The study proposes that the consumer ability to detect the product downsizing will moderate the consumer response to that practice. In particular, it is supposed that if consumers do not notice the tactic at the point of purchase, they do not modify their response towards the product, but they may have especially harsh reactions if they discover the tactic via a fellow consumer or the media (Kachersky, 2011).

H1. If compared with the overt package price increase, equivalent product downsizing leads to a less reduction in buying intentions for consumers who do not detect the product downsizing, but results in a more rapid reduction of buying intentions when they get external information which confirms the usage of a tactic.

H2. Consumers who detect the product downsizing by themselves react to the product downsizing in the same way as to an equivalent overt price increase.

In addition, there is a need for further investigation of psychological response of different consumers to misleading pricing. The theory of planned behavior proposes that a behavioral intention is formed based on the attitude towards the behavior (Ajzen, 1991), and if projecting the theory into the domain of consumer behavior, a buying intention can depend on such variables as consumer attitude to the product and trust to the producer of the product. The former construct has long been given a crucial role in bringing customer satisfaction, and gaining his loyalty (Olshavsky, Miller, 1972). Similarly, there are studies that describes consumer trust as a pivotal cornerstone and a key factor in the establishment of the relational commitment between firm and consumers (Reichheld, Schefter, 2000).

H3. Consumers who detect the product downsizing by themselves modify their product attitude and producer trust perception in a more negative direction, and do not change their response when they get external information which confirms the usage of a tactic.

H4. Consumers who do not detect the product downsizing by themselves do not immediately modify their product attitude and producer trust perception, but deteriorate their response in a more rapid manner when they get external information which confirms the usage of a tactic.

Also, taking into account the possible misleading effect of the pricing tactic under review, it is possible to include the variables related to consumer fairness perceptions and judgments into the consumer response set. Price fairness being a buyer's judgment of a seller's price can significantly affect consumer behavior. However, researchers differentiate between price fairness connected with a price for the product in its static form and pricing fairness that is attributed to the actions taken to realize a price change (Haws, Bearden, 2006). Price fairness is a consumer's assessment and associated emotions of whether the difference (or lack of difference) between a seller's price and the price of a comparative other party is reasonable, acceptable, or justifiable (Xia et al, 2004). Price fairness judgments may be based on previous prices, competitor prices, and profits (Bolton et al., 2003). Pricing fairness considers the comparison of the pricing process with social norms (Cox, 2001). In this case, the social norms are the rules that the community agrees sellers should follow when setting prices (Garbarino and Maxwell, 2010). Whether or not a pricing scheme improves the firm's profit, the attribution of a negative motive to it will cause the perception of pricing unfairness (Campbell, 1999).

Both price offered and the rationale for offering a certain price may lead to perceptions of fairness and to negative consequences for the consumer, such as dissatisfaction, distrust, and lower intentions to repurchase (Xia et al., 2004). Although consumers are able to quickly identify unfair situations, it is conversely more difficult for consumers to assess whether a policy is fair - that is why some studies use the concept of price and pricing unfairness instead (Bolton et al., 2003).

H5. Consumers who detect the product downsizing by themselves immediately modify their price and pricing unfairness perception in a more negative direction, while consumers who do not immediately detect the product downsizing increase their price and pricing unfairness perceptions only upon an external notification and in a more rapid way.

H6. If compared to an overt price increase, an equivalent product downsizing results in more negative price and pricing unfairness judgments.

Finally, it is hypothesized that consumer ability to detect a price change is dependent on the consumer persuasion knowledge.

H7. Consumers who are able to detect the product downsizing by themselves possess a higher persuasion knowledge than those who do not detect the product downsizing by themselves.

Research design

To test the specified hypotheses, the study uses an experimental method. Web-experiment including both within-subject and between-subject designs is employed to compare the behavioral and psychological responses of consumers to product downsizing (misleading pricing tactic) and price increase («fair» pricing tactic) and, secondly, to identify how the ability to detect product downsizing is dependent on persuasion knowledge. The survey structure is represented in Table 1.

Table 1. Survey structure

Table 2. Construct indicators, measurement items, and reliability of measures

At each interaction consumers are offered to evaluate whether they agree with particular statements which are intended to measure several conceptual constructs: product attitude, producer trust, buying intention, price unfairness, and pricing unfairness. The constructs are the same throughout the interaction timeline. Both unidimensional and multidimensional constricts are used. The reliability of multidimensional constricts are quite high at each interaction (see Table 2). Persuasion knowledge is measure only once at the end of the study.

Considering all the above consumer response variables, it is hypothesized the variables will behave differently in consumer groups exposed to different treatments (overt price increase vs product downsizing) over the consumer-product interaction trajectory. In addition, the different responses are expected among those consumers who detected the product downsizing vs those who did not detect that. Thus, three consumer groups are identified in the study: a) Control group (respondents who are randomly assigned to the overt price increase condition); b) Treatment 1 (respondents who are randomly assigned to the product downsizing condition and detected the product downsizing); c) Treatment 2 (respondents who are randomly assigned to the product downsizing condition and did not detect the product downsizing).

Results

Sample and Context

42 respondents answered the questionnaire distributed via a social network in March 2015. At the first interaction there were identified 4 observations with considerably lower ratings on all the dependent variables. At the consequent interactions these observations showed the same pattern. These 4 outliers all being in the control group were deleted from the sample. The analyses proceeds with 38 observations: 12 observations in the Control group, 12 observations in the Treatment 1 group, and 14 observations in the Treatment 2 group. Figure 1 illustrates typical development trajectories across the experimental conditions for all dependent variables characterizing the consumer response.

The questionnaire was provided in Russian and all responded were the residents of Russia. The context of Russia as an emerging market contributes to the research in several ways. Firstly, emerging markets are characterized with high consumer heterogeneity. The diversity with respect to access to products and services tends to be enormous between urban and rural households (Sheth, 2011). Many consumers have no brand or product knowledge. Often, they do not even know how markets operate. Thus, the topicality of the consumer knowledge proves to be very high and managerially relevant. Secondly, the economic turbulence and market changes that take place in Russia in the current time leads to the high price volatility, which put pressure on manufactures, on the one side, and endanger consumers, on the other side. Manufactures have to optimize their market strategies and often raise prices to compensate a high uncertainty. While consumers, in the face of lowering incomes, rationalize their behavior and put a special attention to price-related issues.

Figure 1. Consumer Response Trajectories across Experimental Conditions

ANCOVA

To analyze the data, ANCOVA is used. The choice of the analytical tool is driven by the fact that there may be baseline differences between those in treatment and control groups at the Interaction 1. An imbalance between groups at baseline leads to the biased estimation of treatment effects at the following interaction when the data are analyzed using mixed-design ANOVA. ANCOVA has two major advantages over ANOVA in randomized group experiments. First, it generally has higher power. Second, it reduces bias associated with chance differences between groups that exist before the experiment is carried out. These advantages are realized because the dependent variable means are adjusted to partially account for chance pretreatment differences between the groups.

Thus, a set of 3 (control and 2 treatment groups) x 3 (interaction) repeated-measures ANCOVAs was run on each of the consumer response indicators to test hypotheses using methods appropriate to longitudinal studies of relationship development in the marketing literature (Aaker, Fournier, Brasel, 2004). Simple effects that examined the nature of each interaction at single points in time were run; two-tailed tests were used. Means are provided in Table 3; Table 4 presents the simple effects tests.

Table 3. Descriptive Statistics on Consumer Response Measures (Means and Standard Deviations)

Table 4. Simple Effects Analysis Using A General Linear Model (With Repeated Measures) Procedure

For insight into hypotheses 1 and 2, which are concerned with the dynamic of buying intentions in different treatments groups if compared with the Control group, the pattern of buying intention at times 1, 2, and 3 is analyzed. The analysis partly support the hypothesis 1 by revealing that the Treatment 2 group rapidly shrinks their buying intentions when they are notified of the tactic usage (- .47*). The first part of the hypothesis that claims that product downsizing leads to a less reduction in buying intentions for the Treatment 2 group, if compared with the Control group, is supported (insignificant coefficient.34). The hypothesis 2 is not supported as well: unlike the hypothesis, the Treatment 1 group reacts less negatively to price increase than the Control group (.55**).

The hypotheses 3 and 4 which covers the dynamics of psychological response (i.d. product attitude and producer trust perception) in different treatments groups are also supported only partly. In particular, it was revealed that the Treatment 1 group modifies their product attitude in a more negative direction when faced with downsizing (- .35*), and do not change their response when they get external information which confirms the usage of a tactic. Any significant difference in producer trust perception was not observed for the Treatment 1 group if compared with the Control group. The Treatment 2 group did not show a significant differences from the Control group in both product attitude and producer trust perception throughout the interactions (coefficients before product attitude and producer trust variables are insignificant in all regressions).

The pair of hypotheses related to price and pricing unfairness judgments in different consumer groups come to several conclusions. Firstly, price unfairness have a tendency to raise in all three groups equally from Interaction 1 to Interaction 2: there is a significant coefficient 1.08*** before the base value and no significant coefficients before both treatment dummy variables, which shows that treatments do not deviate from the main tendency. Secondly, there is significant leap in pricing unfairness perception in the Treatment 2 group (1.33***) as compared to the Control group, which means that consumers who do not immediately detect the product downsizing increase their pricing unfairness perceptions rapidly upon an external notification.

t-test

To test whether there are differences in the persuasion knowledge among consumer treatment groups, a simple t-test for mean difference between two independent groups was accomplished. The persuasion knowledge means and standard deviations in two groups are presented in the Figure 2.

Figure 2. Persuasion knowledge in Treatment 1 and Treatment 2 groups (means and standard deviations)

Two-tailored t-test for two independent groups provides the following statistics: t = - 0.35, df = 24. The null hypothesis about mean equivalence is not rejected (p >.10). Thus, there are no significant differences in the persuasion knowledge between consumers who are able and unable to detect the product downsizing by themselves. So the hypothesis 7 is not supported for the current sample.

In general, the study can contribute to the existing research in several ways. Firstly, it deepens the understanding of price framing by interpreting the existing research contradictions through the introduction of consumer ability to detect a misleading tactic (i.d. product downsizing) as a moderating variable. Secondly, it links a consumer ability to detect a misleading tactic with the level of consumer persuasion knowledge.

In particular, the analysis revealed that even when consumers are able to detect the product downsizing, they tend to err in their judgments regarding the price change and underestimate the scope of price increase. That could be driven by the limited abilities to conduct valid mathematical calculations when both the nominator and denominator (that is, product size and total package price) change. Even in the absence of product downsizing, consumers did not provide a valid evaluation of price change scope, and product downsizing being a more mentally challenging way to frame a price change accelerates the tendency to make mistakes among consumers.

The study identified that consumers who do not immediately detect the product downsizing increase their pricing unfairness perceptions and decrease buying intentions rapidly upon an external notification. As the same effect is not observed for the price unfairness construct, it can be assumed that price and pricing unfairness should really be treated as separate constructs, which is propagated in some academic literature on consumer fairness judgments (Haws, Bearden, 2006).

The study did not reveal a significant difference in the level of consumer persuasion knowledge among consumers who were able and unable to detect a product downsizing. That could raise the questions on the validity of the persuasion knowledge scale used in the study and appeal to the development or adaptation of other scales which are more relevant to the purposes of the study. The possible alternative is the Pricing Tactic Persuasion Knowledge (PTPK) scale developed by Hardesty, Bearden, and Carlson (2007) which tests more objective, rather than subjective persuasion knowledge in the domain of pricing by testing consumer knowledge of concrete pricing tactics used in a particular market.

As the current empirical study is initially conducted as a pilot study, an obvious limitation of the research is its small scope which likely resulted in the insignificant effect sizes for some studied variables. The specified limitation is expected to be handled when a full-scale study will be conducted.

Приложение 2

Апробация результатов исследования на конференции 6th EMAC Regional Conference, WU Vienna, Austria, September 16-18, 2015

Consumer Response To Misleading Pricing Tactics: The Case Of Product Downsizing

Price increases are a widespread phenomenon in a variety of markets. Such increases can be driven by market factors or by a desire of the company to increase profit margins. Regardless of the purpose of price increases, consumers usually negatively react to them as they has a detrimental effect on their wellbeing. To mitigate the negative consumer response to a price increase, companies can manage the way a price increase is presented to the market. Instead of raising the price for a product, the company can decrease the quantity/size of a product and remain the price of the product item unchanged. On the one hand, it allows keeping the product available for consumers; on the other hand, it makes hard to compare prices directly, which could be potentially perceived by consumers as unfair or deceptive (Zaltman, 1978; Hardesty, Bearden, Carlson, 2007).

The motivation of marketers behind using pricing tactics that can mislead consumer from making an optimal choice is the possibility to get additional benefits. Marketers may not necessarily be trying to deceive consumers, but consumers are often affected nonetheless (Manning et al. 1998; Sprott et al. 2003). McGraw and Tetlock (2005) reason: «Consumers who have been gulled into thinking of themselves as part of a corporate family or partnership may feel especially bitter when they discover that the other party was treating them along purely as objects of monetary calculation». Thus, misleading marketing practices once successfully implemented can become a source of consumer dissatisfaction over time, as consumers learn and develop their marketing expertise together with marketers. Getting financial benefits at the expense of consumers' welfare due to consumer's inattention or limited knowledge in something can bring significant losses to the company, once consumers gain persuasion knowledge in the field.

The questions the study intends to answer are the following: How do consumers respond to price increases framed in a misleading vs «honest» way? Does the effect of such practices differ among consumers possessing different levels of market knowledge?

Theoretical Background and Hypothesis Development

The price and its impact on consumers has always been a focal point in the economic and management disciplines. Traditional economic models treat price as the monetary sacrifice a consumer makes to acquire a product or service (Stigler, 1987) and assume that an individual should make the same choice when faced with equivalent decision problems. Although these principles have been usefully applied to a variety of marketing problems, recent research on the psychological aspects of pricing suggests that the role of price might be more complex than anticipated by standard economic principles. In particular, a number of studies demonstrated that the way price information is presented, termed price framing (Tversky and Kahneman, 1981), often significantly influences perceptions of value.

The nature of framing appears to differentially affect consumer perceptions of deals that are equivalent on a unit-cost basis but worded or presented differently (Sinha, Smith, 2000). The frames of product price vs product size changes to present an equivalent unit-cost change has received their attention in the studies of both price decreases (often for promotional purposes) and price increases. The framing of price increases as an overt price change or less visible for the consumer products downsizing (i.e. reducing the volume of product per package without a proportional decrease in package price) leads to different consumer responses to changes that are equivalent on the unit-price basis. In a range of articles that compare the consumer demand sensitivity to an equivalent price increase and product downsizing, it is demonstrated that consumers are more sensitive to price over quantity/size changes because of either their unawareness of product size, inattention to unit prices, or relative uncommonness of product downsizing in the marketplace (Gourville, Koehler, 2004; Cakir, Balagtas, 2014). However, some studies does not prove that the differential sensitivity to differently framed price increases exists (Imai, Watanabe, 2014). The results of the studies are contradictory and demand further clarification, in particular, by introducing moderating variables that allow interpreting the differences in the above studies. This study proposes that the consumer ability to detect the product downsizing will moderate the consumer response to that practice:

H1. Consumers who detect and do not detect a product downsizing differently change their buying intentions in relations to a product.

Presumably, the difference in the response to overt and covert price increase framings can be found not only at the level of behavioral achievements, but also at the level of consumer perceptions of alternatives. Numerous studies have shown that consumers' acceptance of a price, particularly a price increase, depends on considering it «fair» (Kahneman, Knetsch, Thaler, 1986). In case of pricing, the overt raise of price per product could be regarded as such a fair standard, because such a way to increase price is clear and does not demand additional cognitive costs to evaluate the extent of price increase. On the contrary, product downsizing can be regarded by consumers as a manipulative intent of the company to mislead consumers from an optimal choice and thereby gain from consumer limited attention or unawareness. Both price offered and the rationale for offering a certain price may lead to perceptions of unfairness and to negative consequences for the consumer, such as worsened product attitude (Xia et al., 2004):

H2. Consumers who detect and do not detect a product downsizing differently change their product attitude, price and pricing unfairness perception in relations to a product.

Pricing tactics include marketers' efforts to generate favorable price perceptions regarding their brands, stores, and offerings (Hardesty, Bearden, Carlson, 2007). Some pricing practices mislead consumers leading to a suboptimal choice. When faced with the practice in routine life the consumer can be unaware of practice usage. But «over time consumers develop personal knowledge about the tactics used in these persuasion attempts» (Friestad, Wright, 1994). The understanding of practice nature can be gained with experience or through the external information. Friestad and Wright (1994) introduced the Persuasion Knowledge Model (PKM) that describes how people's persuasion knowledge influences their responses to persuasion attempts, in particular, how people use their persuasion knowledge to refine their attitudes toward products and marketers. Persuasion knowledge guides consumers' attention to aspects of an advertising campaign or price presentation, providing inferences about possible background conditions that caused the agent to construct the attempt in that way (Friestad, Wright, 1994). It is hypothesized:

H3. Consumers who detect a product downsizing correct their product judgments and behavior immediately, while consumers who do not detect a product downsizing change their behavior only after they are notified of product downsizing usage.

H4. Consumers who detect a product downsizing possess a higher persuasion knowledge than those who do not detect the product downsizing.

Research design

To test the specified hypotheses, the study uses an experimental method. Web-experiment including both within-subject and between-subject designs is employed to compare the behavioral and psychological responses of consumers to product downsizing (misleading pricing tactic) and price increase («fair» pricing tactic) and, secondly, to identify how the ability to detect product downsizing is dependent on persuasion knowledge. The survey structure is represented in Table 1.

Table 1. Survey structure

At each interaction consumers are offered to evaluate whether they agree with particular statements which are intended to measure several conceptual constructs: product attitude, buying intention, price unfairness, and pricing unfairness. The constructs are the same throughout the interaction timeline and are measured using 7_point Likert scale. The multidimensional constricts are reliable at each interaction (Chronbach alphas > 0,79). Persuasion knowledge is measured only once at the end of the study.

Considering all the above consumer response variables, it is hypothesized the variables will behave differently in consumer groups exposed to different treatments (overt price increase vs product downsizing) over the consumer-product interaction trajectory. In addition, the different responses are expected among those consumers who detected the product downsizing vs those who did not detect that. Three consumer groups are identified in the study: a) Control group (respondents who are randomly assigned to the overt price increase condition); b) Treatment 1 (respondents who are randomly assigned to the product downsizing condition and detected the product downsizing); c) Treatment 2 (respondents who are randomly assigned to the product downsizing condition and did not detect the product downsizing).