The power of pricing

: analyzing the effects of pricing authenticity on consumer responses in fashion retail

Abstract

Given that businesses want to build trust, loyalty, and positive purchasing decisions, there continues to be a lot of academic interest in studying retail pricing strategies. While pricing systems and their effects on consumer behavior are well-documented in retail literature, there remains a lack of research specifically addressing the impact of how several pricing strategies influence purchase intention and brand loyalty in fashion stores. Through two online experimental studies involving 312 participants, this research investigates the influence of pricing strategies on purchase intention, brand loyalty and positive WOM considering the mediating role of credibility and brand personality, and the moderating role of brand knowledge. Results indicate a significant association between pricing strategy, purchase intention, and brand loyalty. Specifically, pricing strategies perceived as "more sincere" enhance brand credibility and personality, leading to increased purchase intention and positive WOM. Significantly, the study found a discernible moderating influence of brand knowledge on these relationships. Theoretical implications highlight the importance of considering pricing strategy as a crucial determinant of consumer behavior in fashion retail. Managerial insights suggest that prioritizing transparency and honesty in pricing communications can foster consumer trust and loyalty, ultimately contributing to the long-term success of fashion retailers.

Date of Award	18 Jul 2024
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Maher Georges Elmashhara (Supervisor)