B2C Online Pricing Practices and Potential Impact upon Firm Reputation and E-consumer Trust

Abstract

There is an argument that the palpable ease with which e-tailers can change menu prices on-line has lead to the emergence of irrational pricing. This paper focuses upon on-line pricing practices, their potential relationship with e-consumer trust and perceived reputation of e-tailers. Whilst online pricing practices and e-trust has been the subject of much erudite research, there has been little or no research that explicitly juxtaposes the two areas. The data is obtained from responses to questionnaires completed by business undergraduate students. The questionnaire rationale is to gather data concerning a range of on-line shopping preferences and questions posed investigate the respondents' perceptions and attitudes towards various on-line pricing practices, including price discrimination. To improve the richness of the study, follow-up semi-structured (themed) interviews have been administered. The managerial implications relating to on-line pricing practices and e-trust are rich and varied. For example, there is evidence that some on-line pricing practices, such as first degree price discrimination, can negatively impact facets of e-trust i.e. benevolence and integrity and hence, upon an organisation's reputation. Interestingly, many e-consumers, whilst believing privacy to be an important shopping factor, do not understand how organisations collect and use personal information. Additionally, negative feelings assigned to price comparison sites can be transferred to specific e-tailers listed upon the site. Conversely, organisations can enhance the consumer perception of benevolence and integrity by becoming members of cash back co-operative schemes. There is evidence that econsumers find price differences based upon product configuration and delivery to be acceptable.