Fairness perceptions of retail price increases by foreign and domestic brands: The roles of ethnocentric beliefs, profit stickiness, and contextual information

Sujay Dutta, Attila Yaprak, Dhruv Grewal

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

Although consumers do not usually take kindly to price increases, their perceptions of fairness of price increases are contingent on relevant factors. This study investigates consumers' perceptions of the fairness of retail price increase by a domestic versus a foreign brand, as moderated by consumers' ethnocentricity, bias toward inferring a profit motive from a price increase (i.e., “profit stickiness”), and relevant contextual information. Over the course of two sets of experiments, the authors find that ethnocentricity does not necessarily lead to the intuitively expected favorable (unfavorable) bias toward (against) a domestic (foreign) brand's decision to raise prices, subject to profit stickiness and contextual information. These findings have implications for theory, practice, and further research.

Original languageEnglish
Pages (from-to)37-45
Number of pages9
JournalJournal of Business Research
Volume75
Early online date16 Feb 2017
DOIs
Publication statusPublished - 1 Jun 2017

Keywords

  • Consumer ethnocentrism
  • Price fairness
  • Profit stickiness
  • Retail price increase

ASJC Scopus subject areas

  • Marketing

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