The use of consumer's price information search behaviour for pricing differentiation in retailing

Abstract

The purpose of this paper is to analyse the potential of price-information-seeking behaviour (PISB) as a basis for pricing differentiation in the retail grocery market. Based on a model developed by Urbany et al. (1996), we analyse the presence of consumer clusters showing differences in their PISB and the possibility of identifying a particular profile for each of the clusters. The cluster analysis identified two clearly separated clusters: high and low intensity price-information seekers. Based on this clustering, a discriminant analysis revealed that some of the independent variables proved to be good descriptors of the consumer profile of the clusters. The joint consideration of the clusters and their profiles allows us to provide some managerial implications for retailers.

Keywords:

• Retail
• Pricing
• Prices
• Search
• Segmentation