Manipulating Consumer Price Expectations for a 10K Road Race

Abstract

Understanding consumers' response to price has become an important issue for managers of public sport and leisure services as they shift their dependence on revenue from government sources to user fees. Employing an experimental design, we manipulated participants' price expectations for the race entry fee of a 10K road race. Subjects were divided into six groups and provided with information relating to a different service outcome. Subsequent price expectations were elicited on the basis of the information provided in each message. Results indicated that messages including the cost of service provision information, information suggesting the loss of services, and information suggesting personal loss, significantly raised subjects' price expectations. One practical implication of these findings is that managers of public sport and leisure services considering price increases for their services should introduce them by outlining the purpose and the costs and benefits associated with the increase. Further, implementing effective communication strategies regarding price increases may significantly increase consumers' acceptance of an otherwise undesirable management decision.

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