IDEAS home Printed from https://ideas.repec.org/a/aio/manmar/vxiiy2014i2p205-218.html
   My bibliography  Save this article

The Influence Of Hysteresis In Consumer’S Behaviour For Premium Price Evaluation

Author

Listed:
  • Evgeny KRYUKOV

    (Transport and Telecommunication Institute, Riga, Latvia)

  • Vladislav MALGIN
  • Irina MALGINA

Abstract

The paper deals with an example of the manifestation of the hysteresis in consumers’ behaviour for the Latvian company operating on the market closest to oligopoly and having a local brand name. Based on the quota sample of 332 company stores consumers, their loyalty, willingness to pay for domestic cosmetic products and the propensity to buy habitual products were evaluated. In the survey the unfolding bracketing procedure is used. It is shown that the relationship between the number of loyal consumers and the product price depends on the price increase or decrease and has the form of a hysteresis loop. The width of the hysteresis loop depends on the pricing of a competing company. The range of the premium prices bringing a positive economic impact is determined. The obtained results confirm a considerable influence of the hysteresis effect on consumers’ sensitivity to price changes. The findings can be useful for managers in evaluating a possible revenue growth connected with the premium pricing strategy.

Suggested Citation

  • Evgeny KRYUKOV & Vladislav MALGIN & Irina MALGINA, 2014. "The Influence Of Hysteresis In Consumer’S Behaviour For Premium Price Evaluation," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, vol. 0(2), pages 205-218, November.
    • Handle: RePEc:aio:manmar:v:xii:y:2014:i:2:p:205-218
    as

    Download full text from publisher

    File URL: http://mnmk.ro/documents/2014_X2/7-8-2-14.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gordon, Mirta B. & Nadal, Jean-Pierre & Phan, Denis & Vannimenus, Jean, 2005. "Seller's dilemma due to social interactions between customers," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 356(2), pages 628-640.
    2. Netemeyer, Richard G. & Krishnan, Balaji & Pullig, Chris & Wang, Guangping & Yagci, Mehmet & Dean, Dwane & Ricks, Joe & Wirth, Ferdinand, 2004. "Developing and validating measures of facets of customer-based brand equity," Journal of Business Research, Elsevier, vol. 57(2), pages 209-224, February.
    3. Boccaletti, Stefano & Nardella, Michele, 2000. "Consumer Willingness To Pay For Pesticide-Free Fresh Fruit And Vegetables In Italy," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 3(3), pages 1-14.
    4. Paul Klemperer, 1995. "Competition when Consumers have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(4), pages 515-539.
    5. Niklas Bondesson, 2012. "Brand Image Antecedents of Loyalty and Price Premium in Business Markets," Business and Management Research, Business and Management Research, Sciedu Press, vol. 1(1), pages 32-47, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Deborah Lacitignola, 2021. "Handling Hysteresis in a Referral Marketing Campaign with Self-Information. Hints from Epidemics," Mathematics, MDPI, vol. 9(6), pages 1-17, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jackie Krafft & Evens Salies, 2008. "Why and how should innovative industries with high consumer switching costs be re-regulated?," Documents de Travail de l'OFCE 2008-04, Observatoire Francais des Conjonctures Economiques (OFCE).
    2. Jui-Ying Hung & Feng-Li Lin & Wen-Goang Yang, 2012. "Developing Experience-Based Luxury Brand Equity In The Luxury Resorts Hotel Industry," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 6(4), pages 45-58.
    3. Andriakopoulos, Konstantinos & Ladas, Augoustinos & Andriakopoulos, Panagiotis, 2020. "Bank efficiency and leasing in U.S.A. banking system," MPRA Paper 112645, University Library of Munich, Germany.
    4. Lommerud, Kjell Erik & Sorgard, Lars, 2003. "Entry in telecommunication: customer loyalty, price sensitivity and access prices," Information Economics and Policy, Elsevier, vol. 15(1), pages 55-72, March.
    5. repec:hal:spmain:info:hdl:2441/eu4vqp9ompqllr09hc03jc5h8 is not listed on IDEAS
    6. Polo, Yolanda & Sese, F. Javier & Verhoef, Peter C., 2011. "The Effect of Pricing and Advertising on Customer Retention in a Liberalizing Market," Journal of Interactive Marketing, Elsevier, vol. 25(4), pages 201-214.
    7. Bouckaert, Jan & Degryse, Hans & Provoost, Thomas, 2010. "Enhancing market power by reducing switching costs," Economics Letters, Elsevier, vol. 109(2), pages 131-133, November.
    8. Castilho, Rafael, 2018. "Can Switching Costs Reduce Prices?," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 38(1), May.
    9. Lam, W., 2015. "Switching Costs in Two-sided Markets," LIDAM Discussion Papers CORE 2015024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    10. Giacomo Calzolari & Leonardo Felli & Johannes Koenen & Giancarlo Spagnolo & Konrad O. Stahl, 2021. "Relational Contracts and Trust in a High-Tech Industry," CRC TR 224 Discussion Paper Series crctr224_2021_316, University of Bonn and University of Mannheim, Germany.
    11. Emmanuelle Nys, 2008. "Service provision and loans : Price and risk implications," Revue d'économie politique, Dalloz, vol. 118(3), pages 411-428.
    12. Giovanni Dosi & Giorgio Fagiolo & Mauro Napoletano & Andrea Roventini, 2012. "Economic policies with endogenous innovation and Keynesian demand management," Chapters, in: Robert M. Solow & Jean-Philippe Touffut (ed.), What’s Right with Macroeconomics?, chapter 5, pages 110-148, Edward Elgar Publishing.
    13. Shi, Shouyong, 2016. "Customer relationship and sales," Journal of Economic Theory, Elsevier, vol. 166(C), pages 483-516.
    14. Nakamura, Emi & Steinsson, Jón, 2011. "Price setting in forward-looking customer markets," Journal of Monetary Economics, Elsevier, vol. 58(3), pages 220-233.
    15. Anselmsson, Johan & Burt, Steve & Tunca, Burak, 2017. "An integrated retailer image and brand equity framework: Re-examining, extending, and restructuring retailer brand equity," Journal of Retailing and Consumer Services, Elsevier, vol. 38(C), pages 194-203.
    16. Ahtiala, Pekka, 2006. "The optimal pricing of computer software and other products with high switching costs," International Review of Economics & Finance, Elsevier, vol. 15(2), pages 202-211.
    17. Magali Jara & Gérard Cliquet, 2008. "« Retail brand equity: a conceptual and differentiated approach »," Post-Print halshs-00413607, HAL.
    18. Marc Pomp & Victoria Shestalova, 2007. "Switching Costs in Netherlands Energy Markets: Can Liberalisation Bring Benefits to Small Customers?," De Economist, Springer, vol. 155(3), pages 305-321, September.
    19. Chen, Yanyan & Mandler, Timo & Meyer-Waarden, Lars, 2021. "Three decades of research on loyalty programs: A literature review and future research agenda," Journal of Business Research, Elsevier, vol. 124(C), pages 179-197.
    20. P. B. Seetharaman & Hai Che, 2009. "Price Competition in Markets with Consumer Variety Seeking," Marketing Science, INFORMS, vol. 28(3), pages 516-525, 05-06.
    21. Chris Forman & Pei-yu Chen, 2003. "Network Effects and Switching Costs in the Market for Routers and Switches," Working Papers 03-03, NET Institute, revised Oct 2003.

    More about this item

    Keywords

    willingness to pay; premium pricing; hysteresis; consumers’ behaviour;
    All these keywords.

    JEL classification:

    • M30 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aio:manmar:v:xii:y:2014:i:2:p:205-218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catalin Barbu (email available below). General contact details of provider: https://edirc.repec.org/data/fecraro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.