Research news story

Attention arousal through price partitioning

Existing evidence suggests that preferences are affected by whether a price is presented as one all-inclusive expense or divided into a set of mandatory charges.

Research by Assistant Professor of Marketing Marco Bertini explains this phenomenon by introducing a new mechanism whereby price partitioning affects a consumer's perception of the secondary benefits derived from a transaction.

The practice of price partitioning has become increasingly common. Instead of charging a simple, all-inclusive price, firms regularly post sets of mandatory charges attached to various attributes of an offer.

The paper looks at what the effects are of price partitioning on consumer behaviour and has introduced a new set of behavioural effects that result from price partitioning.

"We have shown that price format influences the amount of attention consumers invest in various product attributes: an all-inclusive price discourages a thorough assessment of the offer while a partitioned price sensitizes consumers to secondary attributes they might otherwise overlook".

To view the research paper, see attached 

Price partitioning research paper

Created: Thursday 01 May 2008

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