The boomerang effect of zero pricing: when and why a zero price …

Q: What are the pros and cons of zero pricing?

The current research demonstrates that a zero (vs. low, nonzero) price has a boosting effect on consumer demand when incidental costs are low but has a boomerang effect on demand when incidental costs are high. As far as we know, no extant research has demonstrated the pros and cons of zero pricing side by side.

Q: Does a zero price boost consumer demand?

Prior literature has demonstrated the power of zero pricing to boost consumer demand, but the current research shows a novel "boomerang effect": a zero (vs. low, nonzero) price can lower demand when the offer comes with high incidental costs (e.g., the time cost in commuting to an offline class; the physical risk of getting a new vaccine).

Q: What is zero price effect?

2.1. The “zero price effect” (ZPE) The ZPE was first defined by Shampanier et al. (2007), as a phenomenon in which people overreact to zero price, as if the value of the product increases at this price.

Q: Is zero-pricing a good strategy for marketing?

Zero-pricing is a popular strategy in marketing practice and also draws a lot of attention from academia. Most scholars have focused on the positive effects of zero pricing on con-sumer demand (e.g., Shampanier et al., 2007), while few stud-ies have documented negative effects (e.g., Kamins et al., 2009).

Q: Does a zero price outperform other promotional prices?

Almost all extant findings indicate that a zero price outperforms other promotional prices on various measures, including the demand for the promoted product and the willingness to pay for the product after the promotion ends.

Participants were 205 students (Mage = 20.59, SD = 2.27; 68% female) from a large Midwestern university in the United States. Participants completed an online survey on consumer behavior (in which th… See more

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The Boomerang Effect Of Zero Pricing: When And Why A Zero Price …

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Is $0 Better Than Free? Consumer Response To “$0 ... - ScienceDirect

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Sep 1, 2020 · The Price of “Free”-dom: Consumer Sensitivity to Promotions with Negative Contextual Influences. Journal of Consumer Research (2006) Promothesh Chatterjee et al. ...

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Hidden Price Promotions: Could Retailer Price Promotions Backfire ...

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Jan 1, 2022 · The index for moderated mediation was significant as the 95% CI did not include zero [0.34, 1.28]. ... We predicted that hidden-price promotions had a negative impact on …

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FAQs about The boomerang effect of zero pricing: when and why a zero price … Coupon?

What is the boosting effect of zero pricing?

coefficient of the linear term indicates that an increase in the price significantly reduces the sign-up rate, consistent with our prediction of a linear, negative relationship between the price and demand when incidental costs are relatively low. This supports H1a (the boosting effect of zero pricing). 2.00e-5, t(2061) = 4.31, p < .001). ...

What are the pros and cons of zero pricing?

The current research demonstrates that a zero (vs. low, nonzero) price has a boosting effect on consumer demand when incidental costs are low but has a boomerang effect on demand when incidental costs are high. As far as we know, no extant research has demonstrated the pros and cons of zero pricing side by side. ...

Does a zero price boost consumer demand?

Prior literature has demonstrated the power of zero pricing to boost consumer demand, but the current research shows a novel "boomerang effect": a zero (vs. low, nonzero) price can lower demand when the offer comes with high incidental costs (e.g., the time cost in commuting to an offline class; the physical risk of getting a new vaccine). ...

What is zero price effect?

2.1. The “zero price effect” (ZPE) The ZPE was first defined by Shampanier et al. (2007), as a phenomenon in which people overreact to zero price, as if the value of the product increases at this price. ...

Is zero-pricing a good strategy for marketing?

Zero-pricing is a popular strategy in marketing practice and also draws a lot of attention from academia. Most scholars have focused on the positive effects of zero pricing on con-sumer demand (e.g., Shampanier et al., 2007), while few stud-ies have documented negative effects (e.g., Kamins et al., 2009). ...

Does a zero price outperform other promotional prices?

Almost all extant findings indicate that a zero price outperforms other promotional prices on various measures, including the demand for the promoted product and the willingness to pay for the product after the promotion ends. ...