When Does Partitioned Pricing Lead to More Favorable Consumer Preferences? Meta-Analytic Evidence

Abstract

ABSTRACT There has been contradictory evidence regarding the impact of partitioned pricing. Research has shown that partitioning a price into multiple components can result in more favorable preferences due to a lower recalled price, or less favorable preferences due to unfavorable surcharge evaluations. To explain these divergent effects, the authors examine the role of price presentation moderators, reflecting how managers convey the prices to consumers (e.g., is the total price present or absent?), magnitude moderators, reflecting the actual prices charged (e.g., what is the surcharge magnitude?), and contextual moderators, reflecting non-price transaction characteristics (e.g., is the product category hedonic or utilitarian?). A meta-analysis of 17 years of partitioned pricing research examining 149 observations in 27 papers (N = 12,878) suggests that consumers respond more favorably to partitioned pricing than all-inclusive pricing when the total price is absent, as the price level increases, when th...

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