Title

What Type of Retailer Should Offer a Price Matching Guarantee?: It Depends on the Fit Between the Retailer's Reputational Strategy and the PMG Pricing Tactic

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Abstract

How retailers position themselves serves a basis for their reputational strategy. Two key reputational basis are service and price. This research investigates how the synergy between the retailer’s reputational strategy and the price matching guarantee (PMG) tactic impacts consumers’ pre-purchase perceptions of the retailer. Findings indicate the offering a PMG is beneficial to retailers with a strong service reputation or those with a poor price reputation. This intention to ask for a refund if a lower price is found only if the retailer has a poor service reputation. Finally, this research investigates how the response of a retailer (honoring or not honoring PMG) influences post-purchase perceptions of the retailer. Findings indicate that not honoring it hurts evaluations of retailers, regardless of the reputational basis, however, honoring it only enhances evaluations for retailers whose reputation is based on price.

Disciplines

Advertising and Promotion Management | Business | Business Administration, Management, and Operations | Marketing | Sales and Merchandising

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