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Setting Fair Prices – Fundamental Principle Of Sustainable Marketing

Author

Listed:
  • Iacob Cătoiu

    (Academy of Economic Studies, Bucharest, Romania)

  • Diana Maria Vrânceanu

    () (Academy of Economic Studies, Bucharest, Romania)

  • Alina Filip

    (Academy of Economic Studies, Bucharest, Romania)

Abstract

In commercial area, the price has a major importance, being frequently considered among the main criteria used in buying decision process. Price fairness derives from equity theory and it is focused on assuring in a transaction a reasonable report between the customer’s sacrifice and the value offered by the seller. In three marketing experiments we have evaluated customers’ fairness perceptions of differential prices, this tactic being frequently used by sellers. One important finding was that the motive for setting differential prices is important in fairness evaluation. Price differences based on social motives are perceived fairer than those motivated by company’s interest. The differential prices on customer category are perceived fairer than zone prices. In all three marketing experiments it was demonstrated that price fairness has a significant influence on value perception and on buying intentions. Fair prices setting is one of the principles sustainable marketing is based on, reflecting a long term orientation for a company. By following this decisional direction, the commercial firm increases the value offered to its customers and it becomes more socially responsible.

Suggested Citation

  • Iacob Cătoiu & Diana Maria Vrânceanu & Alina Filip, 2010. "Setting Fair Prices – Fundamental Principle Of Sustainable Marketing," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 12(27), pages 115-128, February.
  • Handle: RePEc:aes:amfeco:v:12:y:2010:i:27:p:115-128
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    File URL: http://www.amfiteatrueconomic.ro/temp/Article_934.pdf
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    References listed on IDEAS

    as
    1. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
    2. Schein, Andrew, 2002. "Concern for fair prices in the Israeli housing market," Journal of Economic Psychology, Elsevier, vol. 23(2), pages 213-230, April.
    3. Goodwin, Cathy & Ross, Ivan, 1992. "Consumer responses to service failures: Influence of procedural and interactional fairness perceptions," Journal of Business Research, Elsevier, vol. 25(2), pages 149-163, September.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Daniel Serbanica & Violeta Radulescu & Anca Francisca Cruceru, 2015. "The Role of Marketing Audit in Evaluation Sustainable Marketing Performance in Romanian Organizations," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(40), pages 1011-1011, August.
    2. Ioana Cecilia Popescu & Diana Maria Vrânceanu & Mihai Ioan Roșca, 2012. "The role of promotional strategies for small and medium- sized entreprises in sustainable marketing," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 15(46bis), pages 97-110, December.
    3. Laurenţiu-Dan Anghel & Mihaela Constantinescu & Ștefan Claudiu Căescu, 2012. "Relationship marketing with the supply chain a prerequisite for business sustainability," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 15(46bis), pages 3-24, December.
    4. Catoiu, Iacob & Vranceanu, Diana Maria & Tatu, Cristian, 2010. "Framing Influence on Fairness Perceptions of Differential Prices," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 158-172, September.
    5. Hans Ruediger Kaufmann & Mohammad Fateh Ali Khan Panni & Yianna Orphanidou, 2012. "Factors Affecting Consumers’ Green Purchasing Behavior: An Integrated Conceptual Framework," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(31), pages 50-69, February.
    6. Nicolae Al Pop & Mihaela Roman & Adina Săniuţă & Carmen Petrişoaia, 2012. "Relationship Marketing, Engine of Sustainable Development and Organisational Change in the Romanian Business Environment," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(32), pages 349-364, June.

    More about this item

    Keywords

    sustainable development; sustainable marketing; fair price; price fairness; differential prices; distributive fairness; procedural fairness;

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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