The influence of gendered price discrimination on
consumer behavior
The perceived (un)fairness of price differences between men and women.
Annika Roxanna Möller Student ID: 10260242 June 23, 2016
MSc. Business Administration Marketing track
University of Amsterdam Supervisor: Dr. Alfred Zerres
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Statement of originality
This document is written by Annika Möller who declares to take full
responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and
that no sources other than those mentioned in the text and its references have
been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision
of completion of the work, not for the contents.
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Content
Abstract ... 5
1. Introduction ... 6
2. Literature review and hypotheses ... 9
2.1 Gendered price discrimination ... 9
2.2 Perceived price fairness ... 11
2.3 Price attribution beliefs ... 13
2.4 Behavioral outcomes ... 15
2.5 Attitude towards the brand ... 17
2.6 Conceptual model ... 18
3. Methodology ... 19
3.1 Research design ... 19
3.2 The sample ... 20
3.3 Measures ... 20
3.3.1 Gendered price discrimination... 21
3.3.2 Price attributional beliefs ... 21
3.3.3 Dependent variables ... 22
3.3.4. Mediation variables ... 23
3.4 Manipulation test ... 24
3.5 Preparing Data ... 25
3.5.1 Exploratory factor analysis ... 26
3.5.2 Validation of variables ... 27
4. Results ... 29
4.1 Descriptives and correlations ... 29
4.2 Conceptual model analysis ... 31
4.2.1 Analysis of variance ... 31
4.2.2 Multivariate analysis of variance ... 32
4.2.3 Total model testing ... 34
5. Discussion ... 38
5.1 Findings ... 38
5.2 Limitations and future research ... 42
5.3 Managerial implications ... 45
6. Conclusion ... 46
References... 48
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Appendix 1 – Measures ... 51 Appendix 2 - Factor analysis ... 53
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Abstract
This study examined different levels of gendered price discrimination either for men or women and what the influence of this discrimination is on consumers their purchase intention, word-of-mouth intention and willingness-to-pay. It was researched whether perceived price fairness and brand attitude would mediate this effect between gendered price discrimination and the behavioral outcomes. Drawing on the equity theory and social comparison theory, a scenario-based survey experiment (N=238) with a 2x2 design
(advantaged vs disadvantaged and women vs men) has been conducted. The results
revealed that based on procedural fairness both conditions perceive unfairness and a more negative brand attitude when gendered price discrimination is implemented which
negatively influenced the behavioral intentions of consumers. However, there was no significant result found whether some consumers might attribute the price discrepancy to certain beliefs. Gendered price discrimination is still a topic which remains underdeveloped presumably because it is hard to substantiate and find evidence for it. Firms often argue that the price discrepancy is because of differences in marketing tactics and ingredients.
However, women are often charged more for similar products than men and this contributes to gender inequality and increasing costs of female consumers. Theory stated that women keep buying these higher priced gendered products instead of similar cheaper male versions. Yet, the results of this study showed that when price discrimination is implemented by firms, and consumers are aware of this discrimination, independent of whether they have a price advantage or disadvantage and independent of gender, it will have a negative influence on the firm and their reputation.
[Key words: gendered price discrimination, perceived price fairness, consumer behavior, attributional beliefs]
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1. Introduction
Being a female consumer costs more than being a male consumer. According to a study of gender pricing, conducted in New York, women are paying on average more for similar products than men (Blasio de & Menin, 2015). In 42% of the cases researched by this study, products were higher priced for female consumers than for male consumers. On average, the products for women are 7% higher priced than the products for men (Blasio de & Menin, 2015). The biggest difference in price is found in personal care products, as an example in the Netherlands Gilette Venus razor cartridges with three razor blades cost €3,48 per piece, while Gilette Mach 3 with also three razor blades cost €3,20 per piece, an increase of around 10% for being a female (Peters, 2015, retrieved on January 24, 2016). Although these price differences aren’t large, they do have an important influence on woman’s life. Annually a woman pays $1.351 more for the same products and services than men and over the course of the woman’s life, this can reach up to thousands of dollars more for similar products than those of men (Blasio de & Menin, 2015). Not only do female consumers pay more for their products, the past several decades studies found that there is a persistent gender wage gap between the salaries of women and the salaries of men (Duesterhaus, Grauerholz, Weichsel & Guittar, 2011). According to the Central Bureau for Statistics in the Netherlands, women with a fulltime job earn 18% less wage than men (NRCcarriere.nl, retrieved on January 24, 2016). The gender wage gap and the higher prices of the products for women contribute to gender inequality by increasing the costs for women (Duesterhaus et al., 2011).
Price discrimination is the practice of varying prices across consumers or across circumstances (Wu, Liu, Chen & Wang, 2012). The price difference between similar products offered to women and those offered to men is a form of third degree price discrimination. With third degree price discrimination, prices are set according to a segmentation of consumer groups divided by certain characteristics, like age, occupation or gender, and these consumer groups have the same willingness-to-pay in common (Liston-Heyes & Neokleous, 2000; Duesterhaus et al., 2011). Price discrimination is a strategy to maximize the firms’ profits by exploiting consumer heterogeneity in willingness-to-pay, however this can also produce unfavorable customer responses which diminishes the firm’s profit (Wu et al., 2012). Inequity can develop whenever a person perceives that the cost made by the person are unequal to the cost made by another person for that same product (Adams, 1965). This feeling of inequity can generate perceptions of unfairness. According to Xia,
7 Monrou and Cox (2004, p. 3), “price fairness is a consumer’s assessment and associated emotions of whether the difference (or lack of difference) between a seller’s price and the price of a comparative other party is reasonable, acceptable or justifiable”. Perceptions of unfairness can lead to unfavorable consequences for the firm. Consumers may choose to engage in negative word-of-mouth or end the buyer-relationship by not buying from the firm again (Lii & Sy, 2009).
While many studies researched the effect of different forms of price discrimination on consumer perceptions of perceived price (un)fairness (Campbell, 1999ab, Xia et al,. 2004; Haws & Bearden, 2006; Wu et al., 2012), gendered price discrimination is still a topic which remains underdeveloped, even though it is important since it contributes to gender
inequality (Duesterhaus et al., 2011). The research about gendered price discrimination (Duesterhaus et al., 2011; Beldona de & Menin, 2015) only stated the fact that there is gendered price discrimination by comparing different products from men and women. They didn’t look at how consumers perceive this price discrepancy. While most of the research available are about differential pricing (first-degree discrimination) or demand-based pricing. Gendered price discrimination differs from this as it goes against the socially accepted norm of gender equality and therefore it is interesting to see why these products and services targeted to females are still favored over the similar male version product with a lower price. The overall public opinion is that genders have to be equal, yet women still differentiate themselves by buying these gendered products. Why are women willing to act in such an, economically speaking, irrational way to buy those products, even if they would perceive it as unfair? Therefore this research addresses an gap in literature as this gendered price discrimination is different from other price discrimination practices because it raises inconsistencies in the behavior of each gender. This study also tries to give an explanation for these inconsistencies and irrational behavior of women. In other price discriminating practices people act according to their unfairness perception and will not buy from the firm anymore, while with gendered price discrimination women still buy these seemingly price discriminating products instead of opting for the cheaper similar male version.
This research looks into the influence of gendered price discrimination on the perceived price fairness and ultimately the behavioral consequences of this discrimination. Thereby this research tries to give an explanation why women keep buying these products and have a favorable attitude towards it, while it can be seen as discriminating. The
8 following research question will be answered in this study: What is the effect of gendered price discrimination on consumer behavioral responses –purchase intention, word-of-mouth intention and willingness-to-pay– mediated by perceived price fairness and attitude towards the brand and how can this effect be explained by each gender? Therefore the research question is twofold, it first regards the effect of gendered price discrimination and then gives an explanation for why this probably differs between gender. Furthermore, the main
contribution is to include the mediator price attribution beliefs to give an explanation for the irrational behavior in the relationship between gendered price discrimination and the
perceived fairness. To answer this research question, this study will first start with an overview of the literature with the fundamental concepts: gendered price discrimination, perceived price fairness, attributional beliefs, behavioral outcomes and brand attitude. This will be followed by the methodology of this study and eventually the results of the scenario-based survey experiments. Finally the findings, the limitations of this study and the
managerial implications are discussed
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2. Literature review and hypotheses
2.1 Gendered price discrimination
Persistent wage discrimination between men and women has been well documented in several studies, however the everyday costs of being a woman in terms of the consumption and services is still underdeveloped (Duesterhaus, Grauerholz, Weichsel & Guittar, 2011). Gender-based pricing is prevalent in many industries, like insurance, dry-cleaning, hair-dressing, clothing, personal care products and even in children toys (Blasio de & Menin, 2015; Trégouët, 2015). The study of Liston-Heyes and Neokleous (2000) showed that women pay an average of £10 more than men to have their hair cut. Another example is that
retailers have a different way of pricing women’s clothing than the system in which they price men’s clothing (Duesterhaus et al., 2011). Women therefore pay more for clothes that are almost the same as those of men independent of the production costs (Duesterhaus et al., 2011; Blasio de & Menin, 2015). Because women are often willing to pay more for certain products, they are charged more than men (Blasio de & Menin, 2015). Over a female
lifetime, these price differences have a large financial impact, especially since the adult stage is longer than any other lifecycle stage and the personal care products, which have highest price difference, are the most frequently consumed in that life stage (Blasio de & Menin, 2015). While the ingredients in personal care products are not exactly similar, they are not the major drive of the price discrepancy. The largest cost consideration for personal care products is research and development, and it appears that women pay more of these costs passed on into the price than men (Blasio de & Menin, 2015).
Price discrimination is defined for the first time by Pigou (1920, cited in Netseva-Porcheva, 2013), it means that a firm sets different prices for a product for different consumers and the difference in price is not explained by cost differences. The product offered to different consumers is similar, however there can be slight differences in the product between these consumers, like a different scent (Netseva-Porcheva, 2013). The price can be manipulated by the firm to advance its own interests at the expense of the consumer (Nguyen & Meng, 2013). The idea behind implementing price discrimination is to increase the profits of the firm by exploiting differences in willingness-to-pay between consumers (Liston-Heyes & Neokleous, 2000; Lee, Illia & Lawson-Body, 2011; Wu, Liu, Chen & Wang, 2012). To implement price discrimination the seller must be able to separate
10 buyers or buyer groups and there must be differences in the amount buyers are willing to pay for the product.
The findings in the study by de Blasio and Menin (2015, p.40) “showed a female consumer’s experience in the marketplace, which includes unavoidable higher prices for women products”. Different prices are set for products with slight differences in female and male versions. Females are charged a higher price than males for the same products and services they receive and therefore it can be seen as a type of third degree price
discrimination. Third degree discrimination is where the firm charges different prices for different consumer groups divided by certain characteristics which have the same
willingness-to-pay in common, like age, occupation or gender (Liston-Heyes & Neokleous, 2000). Third degree discrimination is based on direct segmentation. Since it is almost impossible to capture each person’s willingness-to-pay, price discrimination is relying on observable physical or social attributes that identifies the consumer (Wu et al., 2012). Within these consumer attributes, some discrimination policies comply with socially accepted norms, while other policies go against these socially accepted norms by discriminating policies based on occupation or residence (Wu et al., 2012). The difference between why some pricing practices are accepted and some are not is whether or not the pricing practice breaks a social norm (Garbarino & Maxwell, 2010). Norms are the collective unwritten definitions of socially approved conduct, rules or ideals, it may refer to values, preferences, beliefs or attitudes (Garbarino & Maxwell, 2010; Pearse & Connell, 2016). Social norms are the rules that the community agree on and expect that the seller must follow (Garbarino & Maxwell, 2010). If the seller does not follow these social norms, the consumer will retaliate when they perceive the norm has been violated (Maxwell, 2002). Nowadays, there are still many struggles for gender equality, but later movements of public opinion are in favor of gender equality (Pearse & Connell, 2016). Gender equality can be seen as a social norm. Another established norm is that a retailer or brand should charge the same amount for the same good to all customers (Garbarino & Maxwell, 2010). Thus, a price difference between products with slight difference based on gender would go against the norm of gender equality and against the norm that groups have to pay the same price for similar products.
Women not always pay more for similar products. From the 397 products that were tested in the study by Blasio and Menin (2015), 72 times men payed more for that particular product than females (compared to 168/397 for females). These higher prices for men were
11 mostly for products like underwear and shaving cream, and can be priced higher because men have a higher willingness-to-pay for these products than women. It could be argued that the price discrepancy in products are sometimes justifiable, because they aren’t exactly similar products and products offered to different segmenting groups sometimes need different marketing tactics (Duesterhaus et al., 2011; Blasio de & Menin, 2015). Liston-Heyes and Neokleous (2000) found results that women haircuts take longer or are more difficult than men haircuts. Yet, these price differentials are still based on gender, instead of another variable on which firms could base their price, like the duration of the haircut. Though there may be some legitimate reasons for the price discrepancies, yet these higher prices are unavoidable for women. Female consumers only buy what is on the market for them and do not have any control over which textiles or products, manufacturers used (Blasio de & Menin, 2015). Reasons for charging women a higher price for similar services and products rest upon individualistic-level explanation (e.g. women are more demanding, require more time or are in need of special ingredients) and these explanations are grounded in cultural stereotypes of gender (Duesterhaus et al., 2011). Concerns for fairness are highly salient in the realm of these pricing practices (Nguyen & Meng, 2013). The inequities that arise from price discrimination practices can generate a sense of unfairness in customers who perceive the treatment as discriminatory (Beldona & Namasivayam, 2006; Ashworth & McShane, 2012).
2.2 Perceived price fairness
From a firm’s point of view, price discrimination may seem like a solution to increase revenues, however it can be negatively received by consumers. Consumers may perceive price discrimination as unfair, especially when it goes against social norms. Prices are much more than just the exchange of money, perceptions and interferences about the price can be seen as the consumer’s evaluation of the product (Campbell, 1999a). According to Xia, Monrou and Cox (2004, p. 3), “price fairness is a consumer’s assessment and associated emotions of whether the difference (or lack of difference) between a seller’s price and the price of a comparative other party is reasonable, acceptable or justifiable”. Consumers can base their perceptions of fairness on the comparability of different transaction
characteristics, like the product, the time, the price and the seller (Xia et al., 2004). Though, individuals rather make fairness judgments on a comparison of the information known about
12 what other buyers payed for the same product (Haws & Bearden, 2006). This information of the prices paid is accessible because of the ease of information-sharing mechanisms online and offline (word-of-mouth). According to Xia et al. (2004) price comparisons with other consumers will have a larger effect on perceived price fairness than comparisons with other sellers or transaction characteristics. When the price is different than the prices paid in the reference transaction, this may induce unfairness perceptions (Xia et al., 2004; Ashworth & McShane, 2012). Comparisons are important for price fairness judgements because they allow the consumer to assess whether the outcome received, is what they deserve (Ashworth & McShane, 2012).
Price comparisons to a reference other can induce three different judgments. The first one is equality in which price comparisons are equal to each other and if this equality is triggered, it normally leads to perceived fairness (Xia et al., 2004). The second and third judgments are based on inequality. Inequality can develop when a person perceives that the value gained compared to his input is unequal to the value gained compared to the input by another person (Adams, 1965). This can be either when the two persons are in a direct relationship or when the two persons are in an exchange relationship with a third party by which they can compare the prices paid (Adams, 1965). The second judgment is advantaged inequality, here the prices are unequal, however the inequality is to the buyer’s advantage, so the price for the buyer is lower than for the reference other (Xia et al., 2004). With the advantaged inequality it is expected that the buyer perceives less price unfairness, than when the buyer faces a price disadvantage. The third judgment is the disadvantaged inequality, the buyer has to pay more than a reference other and therefore has a price disadvantage (Xia et al., 2004). The buyer can feel ashamed or may feel guilt when the inequality is in his advantage, but when the buyer has a disadvantage, severe perceived unfairness can lead to feelings of anger and outrage (Xia et al., 2004). Perceptions of
unfairness can be explained by this equity theory. According to Adams (1965), a person feel that inequity exists, even if it is not in the disadvantaged position.
This can be explained by the distinction between procedural fairness (refers to the procedure by which the price discrimination can be judged as fair) and outcome fairness (refers to the outcome of the price discrimination, i.e. advantaged or disadvantaged position) (Nguyen & Meng, 2012). The outcome fairness is more focused on personal situation, while a procedure is judged fair when it is ensured that the parties involved get
13 what they deserve (Nguyen & Meng, 2012). For gendered price discrimination, most of the time women are in the disadvantaged position and this would lead to severe perceived unfairness, while men in the advantaged position have a less severe unfairness perception. Men would still perceive the price discrimination as unfair, because the procedure of gendered price discrimination goes against social norms. However, they might mind the price discrimination less since they have a positive outcome. According to Nguyen and Meng (2012) procedural fairness can act independently of outcome fairness. People generally care more about procedural fairness than outcome fairness. Consumers that buy the same product generally think that without any explanation from the firm, they deserve the same outcome and therefore need to pay equal prices (Wu, Liu, Chen & Wang, 2012). Price differences between people can be perceived as unfair from the disadvantaged, but also from the advantaged inequality situation (Wu et al., 2012). Taken this into account, the first hypothesis is:
H1: Consumers experience a lower (higher) degree of perceived unfairness when they
are in the advantaged (disadvantaged) situation of a similar transaction due to gendered price discrimination. .
2.3 Price attribution beliefs
Price disparity can be perceived as less unfair when the pricing policy is a norm in society, when the consumer can choose between either the disadvantaged or the advantaged condition or when the consumers have certain beliefs as reason for the price disparity. Consumers are likely to make attributions about who is responsible for the price difference, whether the cause is due to the company or due to themselves (Grewal, Hardesty & Iyer, 2004). The principle of dual entitlement proposes that unfairness results when prices are increased to enhance the profit maximization of the firm, and that a price increase can be seen as fair whenever it maintains the existing level of profit for the firm (Kahneman, Knetsch & Thaler, 1986, cited in Campbell, 1999b). Thus, an acceptable reason for a price increase is when the locus of causality of the price increase is external to the firm. The reason for a price increase is unacceptable when it is internal to the firm (Martin, Ponder & Lueg, 2009). If costs from a supplier are increased and profits therefore would decrease, than the price increase is perceived as fair (Campbell, 1999b; Martin et al., 2009).
14 Consumers make additional richer inferences about the firm’s motive or intention of the price increase. Attribution theory indicates that people are likely to search for
explanations of a negative event (Campbell, 1999a). Some motives will be perceived as more positive (charity or a benefit for employees), while other motives are perceived as negative (exploiting consumer demand for profit-seeking goals) (Campbell, 1999ab). A lower price is perceived as fair when it is charged to less fortunate people, like senior citizens (Campbell, 1999a). Consumers consider why they are being charged more than someone else and this explanation can influence perceptions of fairness.
It could be argued that the price discrepancy in similar products between men and women are sometimes acceptable, because they aren’t exactly similar products and products offered to different segmenting groups sometimes need different marketing tactics. Reasons for charging women a higher price for similar services and products rest upon individualistic-level explanation (e.g. women are more demanding, require more time or are in need of special ingredients) and these explanations are based upon cultural stereotypes of gender (Duesterhaus et al., 2011). Gendered products tap into cultural practices that start early in life to make a distinction between men and women. These essentialist beliefs (men and women are biologically different and therefore require
different products) about males and females help explain why women do not simply choose to buy cheaper products marketed to men (Duesterhaus et al., 2011). It is so ingrained in the way we live to choose the products that are marketed to our own gender. Products
developed for each gender generate the idea that gendered products are rooted in sex-based differences, like differences in PH levels or hormones, and rooted in gender-sex-based differences, like differences in personal care (Duesterhaus et al., 2011). Firms convinced consumers that gendered products are different and that men and women are in need of different kinds of products or ingredients. Therefore consumers choose to buy products that match their gender regardless of the price.
Consumers will perceive the price as more fair when either the firm gives an
explanation or to the extent that the unfavorable outcome can be attributed to an external outcome of the firm or the outcome is due to the consumer self (Campbell, 1999b; Haws & Bearden, 2006; Nguyen & Meng, 2012). In this case, gendered price discrimination can only be sustained if women believe that it is natural and normal to pay more for essentially the same products and services, and if women believe that there is a need for gendered
15 products and these products are really different from each other (Duesterhaus et al., 2011). Therefore, women might perceive the gendered price discrimination as more fair than men, since they believe that these products really serve a different purpose based on sex- and personal care differences. Thus they attribute the price difference external from the firm and due to their own beliefs about sex-differences.
H2: Attributional beliefs about the price difference mediates the effect between
gendered price discrimination and perceived price fairness.
H3: Gender moderates this mediation effect of attributional beliefs between gendered
price discrimination and perceived price fairness.
2.4 Behavioral outcomes
According to Ashworth and McShane (2012, p.145) “Perceptions of price fairness have important effects on consumers’ attitudes, satisfaction, emotional reactions, and behaviors”. Consumers care about price fairness and when prices are unfair, they often try to punish the firms that set unfair prices (Campbell, 1999a). Price discrimination and following from this, perceptions of unfairness, can reduce satisfaction and purchase intentions and can lead to other unfavorable customer responses (Wu et al., 2012; Ashworth & McShane, 2012). Since perceived unfairness can negatively influence the firm, this can lead to lower profits for the firm (Campbell, 1999). Equity theory suggests that every form of inequity is perceived as unfair, because the procedure is unfair and it causes inequity distress (Gelbrich, 2011). Inequity in price can lead to perceptions of unfairness and these can have important effects on behavioral outcomes of the consumer. Perceptions of unfairness can generate unpleasant emotional states of the consumers either in the disadvantaged or in the advantaged
situation. Advantaged consumers will be most dissatisfied when the price discrimination is going against the social norms, even when they pay a lower price (Wu et al., 2012).
However, this depends on the strength of the norm belief people have. Otherwise, the advantaged inequity group have less severe levels of unfairness and thus have a weaker desire to damage the seller (Gelbrich, 2011). Nonetheless, this study expect that women will attribute the price difference to the beliefs that women are in need of different products (and different ingredients) than men. Female consumers will perceive the price difference as more fair although they are in the disadvantaged position. Therefore women won’t
16 necessarily have a unfavorable consumer response towards the firm. Attributional beliefs will give evidence for the fact that women behave in an economically irrational way by buying the higher priced female products, while they have a cheaper option, namely male products (Duesterhaus et al., 2011).
Perceived price fairness is accompanied by positive emotions, on the other hand unfairness will lead to negative emotions (Lii & Sy, 2009). The emotions that a person experiences, affect the behavior of that person (Lii & Sy, 2009). Perceived price unfairness will lead to certain consumer resistance (Campbell, 1999b). Consumers could take no action if they are not motivated enough, they can take self-protection actions by complaining or asking for a refund, and they could take revenge of the firm by switching to another direct competitor and engage in negative word-of-mouth to damage the firm (Xia et al., 2004).
The consumers’ resistance influences the consumers’ willingness to purchase from the firm (Campbell, 1999b). Multiple studies have found that perceptions of fairness influences consumers’ purchase intention (Lee et al., 2011; Wu et al., 2012). According to Maxwell (2002) a negative perception of fairness reduces the consumers’ willingness to purchase. However, when price fairness fosters positive emotions, consumers would like to extend these emotions by purchasing from that firm again (Gelbrich, 2011). When
consumers perceive price unfairness they also may choose to engage in negative word-of-mouth or no word-of-word-of-mouth at all (Lii & Sy, 2009). Word-of-word-of-mouth is the exchange of information about products and services between consumers (Gelbrich, 2011). Negative emotions that are generated by price inequity could either decrease the amount of positive word-of-mouth or increase the amount of negative word-of-mouth.
The success of the gendered products suggest that these products are fulfilling the consumer wants and needs (Duesterhaus et al., 2011). Women want to maintain the gendered difference by expressing themselves even through purchasing the most basic feminine products (Duesterhaus et al., 2011). Women are willing to pay more for products that convey their femininity and address their wants and needs. The willingness-to-pay is the maximum amount of money the consumer is willing to spend on or to give up for the
product in question (Homberg, Koschate & Hoyer, 2005). Research suggest that consumers are often willing to pay a lower price or unwilling to pay a price, if they regard the price as unfair (Campbell, 1999b). This results in the following hypothesis for purchase intention, word-of-mouth intention and willingness-to-pay:
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H4: A higher (lower) perceived fairness will result in a higher (lower) purchase
intention.
H5: A higher (lower) perceived fairness will result in more (less) word-of-mouth. H6: A higher (lower) perceived fairness will result in a higher (lower)
willingness-to-pay.
2.5 Attitude towards the brand
An attitude is an internal evaluation of an object or a brand. Attitudes are often enduring over a time period and are good predictors of the consumer’s behavior (Mitchell & Olson, 1981). According to Fishbein (cited in Mitchell & Olson, 1981, p. 318) a person’s attitude is a function of his salient beliefs at a given point in time. These salient beliefs are associations which are activated from memory. Hence, attitude is a function of the associations or beliefs a person has, in this case, about the brand. Attitude toward the brand can be defined as the feeling of favorableness or unfavorableness to that brand (Maxwell, 2002). An attitude determines the behavioral intentions people have, leading them to specific behaviors towards that object (Mitchell & Olson, 1981; Spears & Singh, 2004). Attitude therefore mediates the effect of behavioral intentions. When sellers or brands violate the norm that the same price have to be paid for similar products of the same brand, consumers may judge the outcome as unfair and have a more negative attitude towards the seller or the brand (Maxwell, 2002). A more negative attitude towards the brand makes the buyer less willing to purchase from that brand in the future and therefore may damage the future profits of that firm. A negative attitude also make consumers unwilling to pay a higher price for products and can cause that consumers will not talk about the brand to others or even will talk negatively about the brand towards others. Therefore a negative attitude will mediate the effect between perceived fairness and purchase intention, word-of-mouth and willingness-to-pay. Stating that there is a positive effect between attitude and the three variables, meaning that when attitude positively increases, the behavioral intentions will also increase. Perceived price fairness will positively affect brand attitude stating that consumers with a higher perceived price fairness will have a more favorable attitude towards the brand.
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H8: A more positive brand attitude will result in a higher word-of-mouth intention. H9: A more positive brand attitude will result in a higher willingness-to-pay.
2.6 Conceptual model
The proposed hypotheses are presented in figure 2.6.1. The focus of this study is on the influence of gendered price discrimination on the consumer behavior of female and male consumers. In this model the independent variables are gender and price discrimination with two positions - the advantaged inequity position and the disadvantaged inequity position. There is an interaction between the condition and the gender as independent variable. The behavioral consequences, purchase intention, word-of mouth intention and the willingness-to-pay, are the dependent variables. This effect is mediated by perceived price fairness and attitude towards the brand. Price attributional beliefs mediates the effect between
gendered price discrimination and the perceived price fairness. This mediation effect of price attributional beliefs can change based on the gender of the participant. So, women are more likely to rationalize the price increase with certain beliefs than men.
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3. Methodology
3.1 Research design
An experiment is the best manner to study the gendered price discrimination and the behavioral consequences for men and women within different price scenario’s. The experiment was conducted in a scenario survey based way in which price differences of products were manipulated. The experiment is used to examine how women perceive paying a higher price (the actual price situation), but also how men perceive paying a higher price (artificial situation) and if there is a difference between these situations. A scenario experiment provides some good internal validity, yet it can lack external validity. A survey method can solve this problem by gathering more respondents and therefore increasing the external validity and generalizability. Another reason for using a survey is, because the attitudes, behaviors, beliefs and opinions of the participant can easily be measured.
However, these attitudes and behaviors are still perceptions of the participant and not their actual behavior.
To test the hypotheses a manipulation of the gendered price discrimination was conducted in a 2x2 between-subjects design. Two different surveys were prepared in which gendered price inequity is applied. The gendered price discrimination manipulation was divided between either the man in the advantaged price inequity group (lower price) and the women in the disadvantaged price inequity group (higher price) or vice versa (see figure 3.1.1). Two products, one male and one female version, have been shown in the experiment next to each other, so participants could compare these prices. According to Xia et al. (2004) a comparison is a necessary condition for perceptions of fairness to occur. The scenario stated that the products are roughly similar, however there is a price difference between those products. The participants were asked to imagine a real-life situation while answering the questions. After seeing the price manipulation the participants were asked to answer multiple questions regarding the perceived price fairness. Finally, the consumers’ behavioral response (purchase intention, WoM intention and willingness-to-pay) of the perceived fairness of gendered price discrimination, the brand attitude and the price attributional beliefs were measured. The participants were randomly assigned to one of the two conditions to create higher external validity.
20 Figure 3.1.1 Scenario’s experimental design.
3.2 The sample
The population of this study consisted of Dutch consumers above 18 years. The participants were collected by using a non-probability convenience sampling method. Random sampling was not possible since the resources were not available and there was no access to the whole Dutch population. The participants were gathered by using Facebook and personal emailing. This study used a 2x2 between-subjects design and therefore at least 200
participants were needed. On 20th of May, 2016, the online experiment was distributed and
the 1st of June the experiment was closed with a total of 233 completed surveys and 5
partially completed surveys which could be used to analyze. The other surveys (around 80) were removed since these surveys had too many missing values to use for the analysis. Of the 238 participants, 75 males (31,5%) and 163 females (68,5%) participated in the survey. Their age varied between 18 and 79 years old and is widely spread with an average age of 36 (SD=13,77). There were mostly participants younger than 25 (35,7%) and participants
between 25 and 45 (35,7%). These participants were either working with a fulltime job (34%), working with a part-time job (29,9%) or student (25,6%). Furthermore, the level of education was equally spread with participants that finished MBO degree (29,1%), HBO degree (26,6%) and University degree (17,7%), and the other participants finished a lower degree. While age, education and their work situation was equally spread, the gender of the participants skewed the sample towards more female consumers than male consumers. The participants were randomly assigned to one of the two conditions. In the condition where females were charged a higher price than men, there were 124 participants and in the condition where males were disadvantaged, there were 114 participants.
3.3 Measures
Each survey started by asking the participants some general questions about their
21 level of education (ordinal) and their work situation (nominal). The survey started with these demographics whereas gender is an important variable in this study. The questions were translated in Dutch since this study is about the Dutch consumer. Almost all measurements used (see appendix - measures) are existing scales and have been used multiples times before and are validated and highly reliable. Only the scale of price attributional beliefs was developed.
3.3.1 Gendered price discrimination
For the manipulation of the gendered price discrimination (price condition x gender), this study used a product to manipulate in price which is comparable for men and women. According to Duesterhaus et al. (2011) hair salons, dry cleaners and personal care products were directly comparable, because these services and products are broadly consumed by men and women. Of all the industries, women pay the highest premium for personal care products with the highest price discrepancy in hair care (48% more than men) and thereafter razors and razor cartridges (Blasio de & Menin, 2015). This study used a personal care
product that is fulfilling the same basic need for men and women, but with slight different versions marketed to each gender. Gilette Fusion Proglide and Gilette Venus Swirl razors were used to let the participants compare the prices. Both razors are similar, except for the design of the razors. The razors have the same flexiball technology by which the blades can reach every place on the body and hence serve the same need. However, the normal price on Bol.com for Gilette Fusion (Men) is €10,99 and for Gilette Venus (Women) €17,99. The price was manipulated, where there was a situation in which the women was disadvantaged and a condition in which the men was in the disadvantaged condition.
3.3.2 Price attributional beliefs
Price increases are seen as more fair when the reason for the price increase is external to the firm, rather than internal to the firm (Campbell, 1999b). External causes are from the customers’ perspective reasonable, while internal causes from the firm are not. The
consumer’s response is influenced by the attribution of the firm’s intended motive and this will influence the consumer’s perception of fairness (Campbell, 1999; Wang & Krishna, 2012). What also can be seen as an external reason is the fact that some price increases can be due to the consumer self and therefore a consumer would perceive the increase as more
22 fair, since it is not the fault of the firm. This study stated that women attribute the price increase to certain essentialist beliefs rather than men in a disadvantaged price condition. Since there is no existing scale to measure the price attributional beliefs for gendered price discrimination, this study developed a scale based on the fact that internal causes from the firm are unjustifiable and external causes of the firm are justifiable reasons.
Women can approve the price discrepancy, if they believe that it is natural to pay more and believe that women are really in need of different products and ingredients, than men (Duesterhaus et al., 2011). Also, these products are developed based on sex-based differences (PH-levels), gender-differences in personal care and essentialist beliefs that women require more time or are in need of special ingredients (Duesterhaus et al., 2011). If consumers believe in these differences between men and women, then the price
discrepancy can be seen as external to the firm and due to the consumer self. This study stated that women are more likely to accept the price discrimination, because women still opt for the higher priced products. Therefore the statements regarding these beliefs were measured based on the gender the participant already indicated. The statements were measured on a Likert scale ranging from 1 (strongly disagree) to 7 (strongly agree) with one of the statements: “similar products are more expensive for women/men because they are in need of different ingredients than men/women”.
3.3.3 Dependent variables 3.3.3.1 Purchase intention
Purchase intention is the plan or willingness to purchase a product. Intention represents the motivation the person has, to carry out a behavior (Spears & Singh, 2004). These intentions can influence behavior, but it is not their actual behavior. Purchase intention can be
measured in many ways, however for this study the scale of Garbarino and Maxwell (2010) was applied. The study by Garbarino and Maxwell (2010) also dealt with price discrimination and therefore the scale fits this study. Purchase intention was measured with 5-items on a 7-point Likert Scale with a Cronbach’s Alpha of 0.95. One of the statements participants responded to is: “If the pricing happened to you, how likely would you be to buy something from Gillette?” with a rating ranging from 1 (very unlikely) to 7 (very likely).
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3.3.3.2 Word-of-mouth intention
Word-of-mouth is the informal exchange of information about products or services between consumers (Gelbrich, 2011, p.211). Word-of-mouth intention was measured with a combined and adjusted version of 3 items from Zeithaml, Leonard and Parasuraman (1996),
Cronbrach’s Alpha of 0.86, and 2 items of Garbarino and Maxwell (2010) on a 7-point Likert Scale ranging from 1 (very unlikely) to 7 (very likely) with one of the statements “How likely are you to speak to friends and family about this pricing strategy?”. This study incorporated negative and positive word-of-mouth with two statements.
3.3.3.3 Willingness-to-pay
The willingness-to-pay is related to the consumers’ perception of price fairness (Krishna, 1991). A higher perceived fairness would likely lead to a higher willingness-to-pay for the product. The willingness-to-pay is the maximum amount a consumer wants to spend on a certain product (Homburg, Koschate & Hoyer, 2005). However, there is some discussion about the use of willingness-to-pay in surveys, as the results are mostly stated and hypothetical preferences of prices instead of revealed preference or actual price paid
(Breidert, Hahsler & Reutterer, 2006). By asking the willingness-to-pay directly, studies found that the participants did not have a real motive to truly reveal their willingness-to-pay
(Breidert et al., 2006). However, in this study willingness-to-pay is used as an approximation of what consumers are willing to pay for the product and not their actual preference. Hence, willingness-to-pay is measured by using an open-ended question. Participants were asked what their maximum price would be that they are willing to pay for the product. This type of measurement is widely used in multiple studies (Krishna, 1991; Homburg et al., 2005).
3.3.4. Mediation variables 3.3.4.1 Perceived price fairness
Perceived price fairness is the consumers’ perceivement of the price determination process as fair or whether the price or payment is appropriate (Lee, Illia & Lawson-Body, 2011). Price differences are the main driver of perceived fairness (Xia et al., 2004). Price fairness is a mediating variable that links the gendered price discrimination to the behavioral
consequences of the price discrimination. Participants rated the extent to which they think the price discrepancy between men and women is fair or acceptable and whether the
24 advantageous or disadvantageous position in price discrepancy led to a different perception of price fairness. There are already many existing scales of perceived fairness and while most of the researchers used perceived fairness, some researchers (Xia et al., 2004) stated that fairness and unfairness have to be separated and can’t be seen as one construct. The scale of Garbarino and Maxwell (2010) solves this problem by stating that a low result on perceived fairness can be seen as unfair, and by adding three other items that can measure the unfairness independently. Therefore this scale is appropriate for this study. Hence, for perceived price fairness a 5-item 7-point Likert-scale from Garbarino and Maxwell (2010), with a Cronbach’s Alpha of 0.93, was used to measure the perception of price fairness. As an example, participants answered the statement “How would you rate the fairness of xxx pricing practice in this situation?’’ by rating it on a scale ranging from 1 (extremely unfair) to 7 (extremely fair).
3.3.4.2 Attitude towards the brand
An attitude towards a person, a concept or a brand is defined as a feeling of favorableness or unfavorableness for, in this case, the brand (Maxwell, 2002). The general attitude towards the brand is affected by the perceived fairness (Maxwell, 2002). Participants reported their brand attitude on a combined 5-item 7-point semantic differential scale by Spears and Singh (2004) and Darke and Ritchie (2007) with a Cronbach’s Alpha of respectively 0.94 and 0.97. Some of the feelings of either the two scales were left out since these feelings were not applicable to the situation or addressed the same feeling when translated into Dutch. Ultimately this scale used the statement: “Please indicate your overall feelings about the brand described in the survey : unappealing/appealing, bad/good, unpleasant/pleasant, unfavorable/favorable, negative/positive”.
3.4 Manipulation test
A pre-test was conducted to test whether the manipulation worked and people determined the razor as unfair as well as if these perceptions of unfairness were different dependent on the gender of the participant and the scenario they were in. The pre-test was also conducted to be certain that everything worked accordingly and that there were no problems in the randomization or the questions. Eleven participants filled in the pre-test with a distribution of five women and six men. Five people were in the condition in which men were
25 disadvantaged and six people were in the condition in which women were disadvantaged. At first sight generally people regarded the price difference as unfair, within scenario one (women payed a higher price) an average of 3.37 (SD=.97) on a 7-point Likert-scale ranging from unfair to fair and within scenario two (men payed a higher price) an average of 2.64 (SD=.70). Hence, the manipulation worked, participants perceived the price discrepancy of the product as unfair. Participants were randomly distributed to the scenario, but within the scenario’s there was no equal distribution of gender. In total two people were in the
disadvantaged position, one men and one women, and the other participants were in the advantaged position. Therefore, based on the pre-test nothing can be said about whether people in different positions have different perceptions of unfairness. Based on the fact that the average for both scenarios was unfair, presumably participants in the advantaged position perceive the price discrepancy also as unfair, like theory already suggested. Furthermore, the randomization and the questions worked appropriately.
3.5 Preparing Data
After having all the data collected, the data was prepared before analyzing the data and testing the hypotheses. First of all, around 80 surveys were deleted since people started these surveys, but did not completed them and there were too many missing values to use these surveys. 233 completed surveys were gathered and five more surveys which are partially completed but have sufficient data to use for the analysis, hence in total 238 surveys were used. In the five partially completed surveys there are missing values for the attributional beliefs. The other surveys had no missing values. Five statements were counter-indicative and were therefore recoded to make them positive (Fairness 3, Attitude 5,
Purchase intention 5, and Beliefs 4 x2). Dummy variables were made for gender, 0 for being male and 1 for female. Also the variable for the condition was recoded, 1 for in the condition where women are disadvantaged and 0 for being in the other condition (men
disadvantaged). The scale of attributional beliefs for men and women was developed in this study, hence a factor analysis was performed. Before forming the variables fairness,
purchase intention, word-of-mouth intention, attitude towards the brand and the
attributional beliefs, the reliability of the statements were tested even though most of the scales were already validated.
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3.5.1 Exploratory factor analysis
For this study a scale was developed for the attributional beliefs. These beliefs are
dependent upon the gender indicated by the participant in the survey. These are the same statements, however they are adjusted to their gender. Since this scale is not already validated, a factor analysis had to be performed to look if the statements measured one construct. First a factor analysis of the attributional beliefs of men and women was conducted by using all the seven statements including the recoded item. Already at first sight of the correlation matrix, statement four of the beliefs was correlated below the minimum of 0.3 with all the other statements. The statement “Women and men should pay the same price for similar products, because the active ingredients of women and men products are the same” is quite different from the other items. This statement stated that there should be no reason for a firm to charge different prices based on gender, since the products are similar. All the other statements actually give a reason for the price discrepancy between gender and therefore these statement correlate more with each other than
statement four which contradict these beliefs. Hence statement four is left out of both scales of the beliefs.
A principal component analysis (PCA) was conducted on the 6 items (without item 4) of attributional beliefs of men with oblique rotation (Direct Oblimin). The Kaiser-Meyer-Olkin measure verified the sampling adequacy for the analysis, KMO = 0.72, and all KMO values for individual items were >0.68 which is above the limit of 0.5 (Field, 2009). Bartlett’s test of sphericity χ2 (15)= 86.89, p < 0.001, this indicated that the correlations between the items
were sufficiently large for PCA. An analysis was done to obtain eigenvalues for each
component. There were two components that had eigenvalues above Kaiser’s criterion of 1 and in combination explained 60.24% of variance. The scree plot showed an inflexion at the second component. Statement 1, 2 and 3 correlated upon component 2 (17.71% of variance) and statement 5, 6, 7 and also 2 correlated upon component 1 (42.53% of variance).
A principal component analysis was also performed for the 6 items of attributional beliefs of women with oblique rotation (Direct Oblimin). The Kaiser-Meyer-Olkin measure had an sampling adequacy of KMO=0.76 and all the KMO values of individual items were >0.71. Bartlett’s test of sphericity χ2 (15) = 234.78, p <0.001 and therefore the correlations
were large enough. For these attributional beliefs there were likewise two components that had eigenvalues above Kaiser’s criterion of 1 and explained 65.26% of the variance. Again,
27 for these beliefs the statements 1, 2 and 3 correlated highly upon component two (19.77% of variance) and the statements 5, 6 and 7 correlated highly upon component one (45.49% of variance). The attributional beliefs for men and women both measure with their
statements two components (see appendix 2; Table 2.1). Presumably component two, made up out of items 1, 2 and 3, measured the stereotypical attributional beliefs, like the
essentialist beliefs that women and men are in need of different ingredients because they have different PH-levels. Component one with statements 5, 6 and 7 are true motivations or beliefs, that women or men buy different products marketed to their own gender because they like the scent more and therefore accept the price difference. Although the different statements measure two different concepts, the variable attributional beliefs is still formed out of the total of six statements. These statements all give a reason why men or women will accept the price difference between consumers, despite that these beliefs are based on either true or stereotypical beliefs.
3.5.2 Validation of variables
Although most of the scales used in this study were already validated, a reliability analysis was conducted to measure if the constructs for the variables fairness, purchase intention, word-of-mouth intention and brand attitude were also reliable in this study. This could differ because the statements were translated in Dutch and some of the variables were made up out of multiple scales, like brand attitude and word-of-mouth intention. The reliability of attributional beliefs was measured based on the previous factor analysis. Reliability means that the construct measures consistently and that the same scores are generated in different periods of time (Field, 2009). According to Field (2009) a Cronbach’s Alpha higher than 0.7 is acceptable. The perceived fairness had a high reliability of Cronbach’s α=0.81, by deleting the recoded value of fairness statement three, the reliability would increase to Cronbach’s α=0.85. Yet, this statement measured if people perceived the price as unfair and is therefore important to include. The purchase intention and attitude towards the brand had
respectively a high Cronbach’s α=0.93 and Cronbach’s α=0.90. The word-of-mouth intention is sufficient with a Cronbach’s α=0.73. The attributional beliefs of men had a Cronbach’s α=0.70 and is acceptable, on the other hand the attributional beliefs of women had a Cronbach’s α=0.76. These reliability results allowed it to create the variables out of the
28 statements. The attributional beliefs for men and women were taken together as total attributional beliefs.
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4. Results
4.1 Descriptives and correlations
An indication of the variables used in this study is given in table 4.1.1. In table 4.1.1 the mean and standard deviation are exhibited and t-tests were performed to look at the differences between men and women in each condition. Generally women in the
disadvantaged position scored lower on price fairness (t(55) = 5.09 with p <0.00), Attitude towards the brand (t(122)= 3.48 with p <0.00), purchase intention (t(122) = 3.76 with p<0.00) and willingness-to-pay (t(61)= 1.96 with p<0.05) than men in the advantaged position. Men were also scoring low on especially their fairness perception, but higher on behavioral outcomes than women. This is according to the theory that perceptions of
unfairness of the price discrepancy are generated by people in both positions (advantaged vs disadvantaged), however less strongly than those perceptions and behavior of people
generated by the disadvantaged position. The attributional beliefs for women were higher than for men (t(120)=-2.60, p<0.01), this indicates that women were more likely to attribute the price discrepancy to certain beliefs than men. Yet, the score of women was also on the lower side based on the 7-point Likert scale. Hence, this means that both women and men disagreed with those statements and presumably did not attribute the price discrepancy to certain acceptable or justifiable beliefs.
The means for the second condition, where men are disadvantaged, were not significantly different from women, only for willingness-to-pay (t(112)=3.48, p<0.00). In this condition there was no real difference between either being in the advantaged position or in the disadvantaged position. Even more interesting is that the willingness-to-pay for men and women was higher in the position where they were discriminated, than in the advantaged position. In the disadvantaged condition, participants had a willingness-to-pay lower than the amount they were charged (the higher price), however in the advantaged condition, participants go even lower than the already lower price they were charged. Thus people in the advantaged condition had a lower willingness-to-pay, than the disadvantaged condition, because they based their willingness-to-pay on the price they should pay.
A correlation analysis was conducted to give an impression of the meaning between the variables. A division for the correlation is made between either condition one or
30 condition two with the number of people in these conditions between brackets. The table shows that there are quite some significant correlations in both conditions. However, perceived price fairness was in both conditions not significantly correlated with the variable attributional beliefs, which could already give an indication that maybe attributional beliefs is not valid as a mediator between gendered price discrimination and perceived price
fairness. Furthermore, in condition one willingness-to-pay had no significant correlation with the mediation variables, perceived price fairness and brand attitude, although in condition two there was a significant correlation. The variable gender was also added to the
correlational analysis to look for the coherence with the dependent variables. Gender
correlated negatively with price fairness, attitude towards the brand, purchase intention and willingness-to-pay. Meaning that a female in the disadvantaged position decreased her purchase intention and willingness-to-pay opposed to men and they perceived the price as more unfair and had a more negative brand attitude than men in that same condition. Also like mentioned before, gender in condition two was negatively correlated with willingness-to-pay. Meaning that females had a lower willingness-to-pay even if they were in the advantaged position. The correlations clarify the direction the variables move in like
expected in the theory, however correlation does not explain the causation of one variable onto another variable.The correlations already gave an indication of the effect, yet more analyses had to be done to test the hypotheses and how the variables affect each other in the model. 1. Price fairness 2. Attributional beliefs 3. Attitude 4. PI 5. WTP 6. WOM Women disadvantaged (124) Women (84) 2.16 (.93) 3.18 (1.12) 3.51 (1.46) 3.71 (1.53) 9.24 (3.09) 3.41 (.88) Men (40) 3.43 (1.43) 2.64 (.95) 4.39 (1.23) 4.84 (1.64) 10.66 (4.08) 3.72 (1.10) 1 - 2 .06 - 3 .51** .30** - 4 .41** .18* .50** - 5 .16 .22* .14 .45** - 6 .26** .33** .29** .48** .38** - 7. Gender -.47** .23* -.28** -.32** -.19* -.15
31 Men disadvantaged (114) Women (79) 2.73 (1.00) 3.40 (1.00) 4.07 (1.07) 4.34 (1.53) 8.79 (3.19) 3.76 (.80) Men (35) 2.79 (1.08) 2.79 (.84) 3.86 (1.01) 4.66 (1.42) 11.30 (4.27) 3.72 (1.13) 1 - 2 .05 - 3 .30** .08 - 4 .28** .05 .41** - 5 .33** -.09 .19* .48** - 6 .13 .09 .20* .51** .19* - 7. Gender -.03 .28** .09 -.10 -.31** .02
Table 4.1.1 Descriptives and correlations. ** correlation is significant at 0.01 level (2-tailed), * correlation is significant at 0.05 level (2-tailed).
4.2 Conceptual model analysis
4.2.1 Analysis of variance
In the following section the first proposed hypothesis was tested. This hypothesis suggest that people in an advantaged price position have lower perceptions of unfairness than people in the disadvantaged position. The hypothesis was tested by using a Univariate ANOVA. First the variable total advantage position is formed, by combining the advantage position of both conditions with men and women. Participants in the advantaged position scored 1 and participants in the disadvantaged position scored 0. Levene’s test showed that homogeneity of variance is not assumed (p <0.05). The advantaged position had a significant effect on perceptions of perceived fairness, F(1, 234) = 16.08, p <0.01, R2=0.14. The contrast
(simple: first) revealed that being in the advantaged position (t(234)=3.08, p<0.01) significantly increased perceived price fairness compared to being in the disadvantaged position (t(234)=2.48, p<0.01). Therefore hypothesis 1 is confirmed: participants in the advantaged position generally had a higher perception of fairness (M=2.96, SD=1.01) while participants in the disadvantaged position had a lower perception of fairness (M=2.35, SD=1.20). Although these differences are significant between the groups, still the perceived fairness is low and negative in both conditions. Hence, both conditions perceived the price discrepancy as unfair. Gender also had a significant effect on perceptions of perceived fairness, F(1, 234) = 19.56, p<0.01. Being a women significantly decreased the perceptions of perceived price fairness (t(234) = 2.44, p<0.01), compared to being a men (t(234) = 3.11, p<0.01). Yet, there was no interaction between gender and being in the advantaged or disadvantaged position.
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4.2.2 Multivariate analysis of variance
A MANOVA was run to measure the different means of multiple dependent variables and to search for the main effects of the independent variables (the condition and gender) and their interaction. Besides that a MANOVA has more statistical power than single ANOVA’s, a MANOVA can also detect if groups differ along a combination of variables (Field, 2009). To run a MANOVA, first some important assumptions had to be tested. The dependent variables are all continuous variables and the factor variables are both categorical. In each group there were different participants because of the random assignation to the conditions. Therefore the observations are independent. The sample size was sufficiently large with 238 participants. The normality assumption measured if the sampling distribution was normally distributed. The Kolmogorov-Smirnov test stated that the dependent variables were all significant on the independent variables and were therefore not normal distributed. However, the central limit theorem states that the sampling distribution will tend to be normal whenever the sample population is larger than 30 (Field, 2009). As the sample gets bigger there is more chance on a normal distribution. The total sample in this study was 238 hence sufficiently large and in each group there were at least 30 participants or more. Based on the central limit theorem the assumption of normality was met. The Pillai-Bartlett trace is the most robust to violations of assumptions and just to keep the Kolmogorov-Smirnov results in mind, this trace was used. Based on the correlation analysis there were no correlations higher than 0.9 and thus was there no multicollinearity between the variables. The assumption of homogeneity of covariance and homogeneity of variance were tested by running the MANOVA.
A MANOVA was run with the three dependent variables – word-of-mouth, purchase intention and willingness-to-pay – and as fixed factors the condition and gender. Box’s M was non-significant which suggest that the observed covariance matrices are equal across groups. The Levene’s test was for the variables word-of-mouth and willingness-to-pay significant (p <0.05), hence variances across groups were unequal. Pillai’s trace was reported since this test is most robust to any violations of the assumptions (Field, 2009). Pillai’s trace showed a significant main effect of gender on the dependent variables with V= 0.08, F(3, 232) = 6.70, p <0.01. The separate univariate ANOVA’s revealed that the significant effect of gender was due to the willingness-to-pay (F= 16.28, p <0.01) and the purchase intention (F= 11.34, p <0.01). Only word-of-mouth intention did not reveal any significant results. The
33 contrast for willingness-to-pay showed that women had a significantly lower WTP (t(234) = 9.01) than men (t(234) = 10.98). Men had a significant higher purchase intention (t(234) = 4.75), than women (t(234) = 4.03).
Pillai’s trace for the condition participants were in, didn’t had any significant effect on either one of the dependent variables with V=0.01, F(3,232) = 0.71, p> 0.05. According to this result, it does not matter if people were either in the condition where women were charged more or where men were charged more. A reason for the fact that no significant result was found, could be that both conditions have an advantaged and disadvantaged group. Thus the groups in the condition were too similar to make a distinction based on condition. The dependent variables did not differ between groups. However, for the interaction between gender and the condition participants were in, Pillai’s trace revealed a significant effect with V=0.04, F(2,232)= 2.92, p<0.05. Yet the univariate ANOVA showed that this significant result was only due to the effect the interaction had on purchase intention (F=3.65, p<0.05). Though, this effect is marginally significant with a significant effect just above the cut-off point (p=0.057). When men were discriminated, women had a mean of 4.34 and men had a mean of 4.66. When women were discriminated, women had a mean of 3.71 and men of 4.84. Figure 4.2.2.1 clearly shows that women reacted strongly on being discriminated by lowering their purchase intention, yet men didn’t react that strongly by being discriminated. Remarkable is also that men had a higher purchase intention than women even when they were the ones that were discriminated. Furthermore, the variables, willingness-to-pay and word-of-mouth, were not significant for the interaction between gender and the condition.
The results of the MANOVA showed no support for only the condition as factor on the multiple dependent variables. The MANOVA revealed some significant effects of gender and the interaction between gender and the condition. The univariate ANOVA, however, showed that these effects were mainly of gender on WTP and purchase intention and for the interaction only on purchase intention. MANOVA has more statistical power since it takes into account the correlations between the dependent variables, therefore it can more easily find group differences than the univariate ANOVA’s (Field, 2009). The MANOVA was to look at the direct effect of the factors on the dependent variables. According to this MANOVA, the factors didn’t had a significant effect on of-mouth, this raises the question if
word-34 of-mouth is influenced by this model. To find support for the variables in the model and how they influence each other, PROCESS macro of Hayes was used.
Figure 4.2.2.1 MANOVA interaction on purchase intention.
4.2.3 Total model testing
MANOVA was used to look for the dependent variables that are explained by the
independent variables. The PROCESS macro of Hayes (2013) was used to find support for the influence of variables in the total model with the mediators. PROCESS tests whether the independent variables influence the dependent variable through another variable and under which interaction an effect operates. In this model there are three mediators – attributional beliefs, perceived price fairness and attitude towards the brand – and gender as a
moderator. Multiple PROCESS regressions were run with the three dependent variables. Model 7 was used as this model contains multiple mediators and a moderator.
Though, first model 7 was run with attributional beliefs as a mediator and gender as a moderator, since theory suggested that attributional beliefs is only a mediator of perceived price fairness and not a mediator of the dependent variables. Gender was examined as a moderator between the condition and the attributional beliefs. Although the total model with attributional beliefs as outcome was significant (F(3,228) = 6.01, p<0.01, R2=0.07), this
was only significant because of the variable gender with a coefficient of 0.57. This means that men and women differ in their reported attributional beliefs by 0.57. From the t-test mentioned before, women (M=3.28, SD=1.07) were more likely to attribute the price
