The role of typicality of partitioning and the presence of total price in the effect of partitioned price on purchase intentions: A comparison of different price presentations using an experimental design

Companies can affect consumer decisions not only with their prices but also with the way they present their price information. Airlines are one of the industries that frequently use different pricing formats, different types of surcharges, and different price presentations. Instead of charging a single price, i.e. all-inclusive price, airline companies frequently partition their ticket prices or add some price components at the different stages of selling process. Companies use partitioned and drip pricing strategies in order to influence their consumers with low prices by reducing the salience of some components of their prices. In this research, two distinct experiments were conducted to see if the intended impact would occur in drip pricing, with a surcharge that customers are unfamiliar with as being partitioned, and the total price is presented directly in the price offer. The participants were asked to purchase an airline ticket from a fictional airline website that randomly guided the participants to a different pricing scenario. The goal of the first experiment, which used a random post-test design with a control group, was to see whether different price presentations produced varied effects on recalled price, perceived price fairness, and ultimately purchase intention variables. When compared to the other two price presentations (drip pricing, all-inclusive pricing), partitioned pricing results in a lower recalled price, a higher perceived price fairness, and therefore a higher purchase intention. In the second experiment, which was carried out with a 2x2 factorial design, the effect of partitioned pricing on the purchase intention through the recalled price, and perceived price fairness, depending on the typicality of partitioning, and the presence of the total price was examined. It is concluded that the presence of the total price and the typicality of the partitioning increase recalled price and perceived price fairness. Recalled total price is higher and purchase intention is lower when a total price is present, in comparison to the absence of total price plus a typical surcharge situation. It is also found that perceived price fairness is higher when a total price is present in comparison to the absence of total price situation, regardless of the typicality of the partitioning.