Price competition with consumer confusion

Copyright © 2013, INFORMS. Article posted with permission.This paper proposes a model in which identical sellers of a homogeneous product compete in both prices and price frames (i.e., ways to present price information). Frame choices affect the comparability of price offers and may cause consumer confusion and lower price sensitivity. In equilibrium, firms randomize their frame choices to obfuscate price comparisons and sustain positive profits. The nature of the equilibrium depends on whether frame differentiation or frame complexity is more confusing. Moreover, an increase in the number of competitors induces firms to rely more on frame complexity, and this may boost industry profits and lower consumer surplus

Consumer evaluation of complaint handling in the Dutch health insurance market

<p>Abstract</p> <p>Background</p> <p>How companies deal with complaints is a particularly challenging aspect in managing the quality of their service. In this study we test the direct and relative effects of service quality dimensions on consumer complaint satisfaction evaluations and trust in a company in the Dutch health insurance market.</p> <p>Methods</p> <p>A cross-sectional survey design was used. Survey data of 150 members of a Dutch insurance panel who lodged a complaint at their healthcare insurer within the past 12 months were surveyed. The data were collected using a questionnaire containing validated multi-item measures. These measures assess the service quality dimensions consisting of functional quality and technical quality and consumer complaint satisfaction evaluations consisting of complaint satisfaction and overall satisfaction with the company after complaint handling. Respondents' trust in a company after complaint handling was also measured. Using factor analysis, reliability and validity of the measures were assessed. Regression analysis was used to examine the relationships between these variables.</p> <p>Results</p> <p>Overall, results confirm the hypothesized direct and relative effects between the service quality dimensions and consumer complaint satisfaction evaluations and trust in the company. No support was found for the effect of technical quality on overall satisfaction with the company. This outcome might be driven by the context of our study; namely, consumers get in touch with a company to resolve a specific problem and therefore might focus more on complaint satisfaction and less on overall satisfaction with the company.</p> <p>Conclusions</p> <p>Overall, the model we present is valid in the context of the Dutch health insurance market. Management is able to increase consumers' complaint satisfaction, overall satisfaction with the company, and trust in the company by improving elements of functional and technical quality. Furthermore, we show that functional and technical quality do not influence consumer satisfaction evaluations and trust in the company to the same extent. Therefore, it is important for managers to be aware of the type of consumer satisfaction they are measuring when evaluating the handling of complaints within their company.</p

Análise de dados de reclamações em empreendimentos habitacionais de interesse social: estudo no Programa de Arrendamento Residencial

O gerenciamento de reclamações é uma prática difundida em muitas emmpresas do setor de manufatura, a fim de proporcionar a melhoria da ualidade de produtos e serviços. No que tange à construção civil, bservam-se poucos estudos sobre a utilização desse tipo de gestão de empreendimentos, sendo poucas as empresas que percebem a utilidade das informações sobre reclamações. O presente trabalho apresenta uma análise de dados de reclamações de usuários de uma amostra de empreendimentos habitacionais de interesse social, com o objetivo de investigar sua utilidade para a retroalimentação do processo de desenvolvimento do produto nesse segmento. Foram analisadas 6.956 reclamações de usuários de 42 empreendimentos habitacionais de interesse social do Programa de Arrendamento Residencial, localizados no estado do Rio Grande do Sul. O trabalho envolveu um tratamento inicial dos dados de reclamações para a montagem de um banco de dados, seguido da aplicação de diversos testes estatísticos. As principais contribuições estão relacionadas com a utilidade dos dados de reclamações, incluindo a geração de indicadores que podem apoiar a tomada de decisão por parte de diferentes agentes envolvidos na produção habitacional, tais como projetistas, construtoras, agentes financiadores e empresas envolvidas na gestão da operação e manutenção. Os indicadores, se bem utilizados, podem contribuir para a melhoria de produtos e serviços que compreendem os empreendimentos habitacionais, possibilitando um aumento na satisfação dos usuários finais

Identifying Patterns of Consumer Response to Price Endings

Wagner R, Beinke K-S. Identifying Patterns of Consumer Response to Price Endings. In: Estelami H, Maxwell S, eds. Proceedings of the 2004 Fordham University Behavioral Pricing Conference. 2004: 94-107