S3658112 | Christina Brinkmann
Multichannel Price Discrimination in the
Grocery Sector
An Empirical Study Investigating the Effect of Higher Online Prices on
Online Purchase Intention under the Influence of E-Service Quality.
Master Thesis Marketing Intelligence – EBM867B20.2018-2019.2
Faculty of Economics and Business – Department of Marketing
Supervisor – dr. A.E. (Arnd) Vomberg
Agenda
› Introduction & Relevance
› Research Question & Framework
› Methodology & Data
› Analysis Results
› Discussion & Managerial Implications
Introduction & Relevance
› Online shopping enjoys great popularity in many industries (fashion, electronics, books), but is less popular for groceries.
› Current Situation:
• 5% of European consumers purchase groceries online (Nielsen Holdings plc, 2017). • Online grocery retailers struggle with profitability (PwC, 2016).
› Future Outlook (5 years):
• 70% of the consumers will purchase groceries online.
• 20% of grocery sales will be generated in the online channel (Nielsen & Institute Food Marketing, 2018).
à Profitability improvement necessary
› Thesis Focus:
Research Question & Framework
Are higher online grocery prices accepted under the provision of a higher service quality, in terms of faster delivery, measured by means of the intention to purchase groceries online?
H3
H2b H2a
H1
Multichannel Pricing
• equal price between offline & online shopping basket
• 20% higher price for the shopping basket online Purchase Intention Online
E-Service Quality
• High level of fulfillment (delivery within 2 hours) • Low level of fulfillment (delivery within 7 hours)
Perceived Value Of The Online Shopping Basket
Covariates
Expenses on groceries/week Planned purchases (yes/no) Amount of people/household Gender
Perceived Price Fairness Perceived Time Pressure Enjoyment of shopping Need for touch
Methodology & Data
IV Fulfillment
delivery within 2 hours (high service quality)
delivery within 7 hours (low service quality) Equal price online and offline 14.89€ | delivery within 2 hours 14.89€ | delivery within 7 hours 20% higher online price 17.87€ | delivery within 2 hours 17.87€ | delivery within 7 hours
› Introduction into setting by consideration of the shopping trip as “planned” (Chu et al., 2008). › Exemplary shopping basket introduced to ensure tangibility and vividness.
› Shopping Basket:
• Only four common products, no statement of brands (Degeratu et al. (2002), Dodds et al. (2006)).
• Balance between sensory and non-sensory products (Degeratu et al. (2002), Dodds et al. (2006)).
Analysis Results
Hypothesis Description Confirmed
H1 A higher online price has a direct negative effect on the online purchasing intention No H2 The effect of a higher online price on the online purchase intention is mediated by the perceived value. Yes H2 a A higher online price is negatively related to the perceived value. Yes H2 b A higher perceived value is positively related to the online purchase intention. Yes H3 The effect of a higher online price on the perceived value is moderated by the level of e-service quality. No
› (Moderated) Mediation Analysis was conducted.
› Price has no direct effect on the online purchase intention. (H1 rejected)
› The effect of price on online purchase intention is indirect only through perceived value. (H2 confirmed)
› Price has a negative effect on the perceived value of the shopping basket. (H2a confirmed) › Perceived Value has a positive effect on the online purchase intention. (H2b confirmed) › E-Service Quality has neither a moderating nor a direct effect on the online purchase
Analysis Results
› Low average online purchase intention (M = 3.11). › Low experience with online grocery shopping (16%).
› Preference for self-selection (27 times stated) and proximity to supermarket (18 times stated) main reasons to not purchase groceries online, followed by delivery time (11 times stated).
Priceà Perceived Value
𝑃𝑉𝐴𝐿𝐴 = −0.42 ∗ 𝑃𝑅𝐼𝐶𝐸 + 0.64 ∗ 𝑃𝐹𝐴𝐼𝑅𝐴 + 0.14 ∗ 𝑃𝑇𝐼𝑀𝐸𝑃𝐴 (1.1)
Perceived Value àOnline Purchase Intention:
𝑂𝑁𝐿𝐼𝑁𝐸𝑃𝐼 = 0.86 ∗ 𝑃𝑉𝐴𝐿𝐴 + 0.23 ∗ 𝑃𝑇𝐼𝑀𝐸𝑃𝐴 + 0.95 ∗ 𝐿𝐴𝑁𝐺_𝐷𝑈𝑀 (1.2)
Price àPerceived Value àOnline Purchase Intention
Discussion & Managerial Implications
› Low experience with online grocery shopping due to respondents origin (Europe). • Increase awareness and customers perceived personal benefits of online grocery
shopping.
› Value perception of the shopping basket is lower with increasing price. › Online purchase intention increases with the increase of perceived value.
• Value perception influencing factors need to be addressed:
• Increase perceived price fairness by reason price increase on additional benefits
and provide purchase advisory.
• Highlight convenience, especially for consumers under time pressure.
› Inexistence of an effect of e-service quality (fulfillment) was not expected and is not in line with existing literature.
Limitations & Further Recommendations
› E-Service quality was not accessed to the full extent.
• Recreation of the study with all four dimensions of e-service quality. › Exclusion of brand names in underlying study.
• Repetition and extension of the study with branded products in the exemplary
shopping basket.
› Sample shows significant differences in demographics under language differentiation. • Addition of customer segmentation to follow up on the underlying research.
› Indirect only mediation
S3658112 | Christina Brinkmann
