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The impact of perceived product quality, service quality and transaction cost on the customer’s willingness to pay after a price increase
Blekinge Institute of Technology, Faculty of Engineering, Department of Industrial Economics.
2019 (English)Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Objective: The objective of the study is to learn how the customer’s willingness pay after a price increase differs given different product conditions. Specifically, how it differs between high and low involvement products and hedonic and utilitarian products. The objective is also to understand what value drivers it is that affect the customers willingness to pay after a price increase.

Methodology approach: An online survey was distributed through social media. The research study was conducted using multiple linear regression and one-way ANOVA using data from 270 participants.

Research limitation: The survey used in the study uses scales that have been revised. This means that other important value dimensions that were a part of the original scales have been neglected.

Results/conclusion: No significant difference was found between the different product groups. The variables; product quality, service quality were both found to have a positive impact on the outcome variable customer’s willingness to pay after a price increase. The variable transaction cost had on the other hand a negative impact on the outcome variable.

Future recommendations: The results of the study indicate that lowering the transaction cost can increase customer’s willingness to pay after a price increase. It also indicates that increasing the product quality and service quality can increase the customer’s willingness to pay after a price increase. Previous research has showed the significant profitability firms can make when they adapt to value-based pricing. Therefore, further studies to investigate the customer’s willingness to pay after a price increase may be of interest.

Place, publisher, year, edition, pages
2019. , p. 89
Keywords [en]
customer perceived value, willingness to pay, price increase, utilitarian and hedonic, value-based pricing, pricing strategy
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:bth-19041OAI: oai:DiVA.org:bth-19041DiVA, id: diva2:1380535
Subject / course
Degree Project in Master of Science in Engineering 30,0 hp
Educational program
IEACI Master of Science in Industrial Management and Engineering
Supervisors
Examiners
Available from: 2019-12-19 Created: 2019-12-19 Last updated: 2019-12-19Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
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