Impact of consumer perception on price fairness

Pricing management represents important but much too often neglected part of marketing strategy. It is presumed that more complete understanding of price and consumer relationship is needed to gain deeper insight of consumer reactions and factors influencing perception of price fairness. Empirical evidence points to several factors influencing price fairness judgements that left unattended or unrecognized could lead to perception of price being unfair. Previous empirical research led to several assumptions with somewhat different conclusions about factors influencing price fairness perception. Some important factors discovered include: reference prices, including past, present and similar products prices comparison, costs for the seller, self-interest bias, perceived motives of the seller and other influences like underestimating of inflationary effects. This paper identifies theoretical considerations of perception of price fairness, analyses several key factors of influence and presents arguments for a new factor inclusion. With that purpose in mind we conducted empirical research testing several factors related to price fairness perception on Croatian sample and results of research conducted by Gielissen et. al (2008) on a sample of Dutch consumers were used as comparison.