A recent study investigated one major area of market- ing decisions: pricing pra

Question

A recent study investigated one major area of market- ing decisions: pricing practices.8 Specifically, the study addressed consumer knowledge and attitudes about the practice of online retailers adjusting their prices according to customer characteristics, such as how frequently they buy from the retailer. Price discrimination has long been commonplace in many industries, but the Internet provides a way of implementing large-scale price dis- crimination. Realize that price discrimination isn’t always a bad thing for individual consumers as sometimes he or she is the beneficiary of a low price. For example, a rental car company may offer a consumer a low rate on a rental car if the person’s recent Web history has shown a search for hotels. Someone who goes straight to the rental car site may not get such a discount.Another website selling cameras charged different prices for the same model depending on whether the visitor to the site had previously visited sites that supply price compari- sons. In general, price discrimination is legal unless it discriminates by race or sex or involves antitrust or price-fixing laws (such as two competitors agreeing to charge certain prices). The study consisted of telephone interviews conducted with a sample of 1,500 adults, screened to find persons who had used the Internet in the preceding thirty days.The questionnaire gathered demographic data and data about Internet usage. In addition, the interviewer read seventeen statements about basic laws and practices related to price discrimination and the targeting of consumers according to their shopping behaviors. Respondents were asked whether each of these statements was true or false. Case Exhibits 16.1–1, 16.1–2, 16.1–3, and 16.1–4 summarize some of the results from this study.

Questions 1.

The information provided here is not detailed enough for a for- mal report, but assume that you are making an informal report in a preliminary stage of the reporting process.Which of these findings do you want to emphasize as your main points? Why?

2. Prepare a written summary of the findings, using at least two tables or charts.

Explanation / Answer

Ans 1. The main findings of the study is as follows :-

1. The regression equation of the knowledge score of the consumers as per the Exhibit 4 is

Education Score = 2.687+ 0.630 Education + 0.383 Income + 0.616 Self perceived ability to navigate internet+ error term

It should be noted that this model or the selected variables explain only 14% variation in the Education score as per R2. The R squared is very less. Hence there are some other variables which are missing in the model.

According to this equation , Education, Income and Self perceived ability to navigate internet has postive impact on the Education score of the consumer. All the parameters are also significant since significance is also less than 0.001 level. But the model will not be the best fit due to extremely low R squared.

- It should be noted that about 30% of people don't know if it is legal to follow price discrimination or not. However majority of them are against price discrimination.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.