HOW DOES PRICE SENSITIVITY VARY AMONG CONSUMERS IN SUBSCRIPTION SERVICES COMPARED TO TRADITIONAL PAY-PER-PRODUCT SERVICES?
DOI:
https://doi.org/10.53555/eijbms.v10i1.185Keywords:
Price Sensitivity, Subscription Services, Pay-Per-Product, , Consumer Behavior, Pricing StrategiesAbstract
This paper aims to understand the difference in price sensitivity between consumers who use subscription services and those who use pay-per-consumption services. The study adopted a cross-sectional survey of 100 consumers and interviews to enhance understanding of consumer behavior. The results reveal a significant difference in price sensitivity, with subscription users demonstrating lower sensitivity (mean score: 2.8) than the pay-per-product users who gave a mean score of 4.2. Some of the reasons that may explain this difference include perceived value, convenience, and the psychology of the sunk cost. Other demographic variables, including age and income, also affected the results, as they affected price sensitivity about the various service models. These findings have significant implications for firms regarding the pricing of products; while subscription models allow for the implementation of price creep, pay-per-product models need to be implemented with care to ensure consumers are not turned off. It advances the knowledge of consumers’ behavior in pricing situations and provides important implications for improving pricing strategies in both subscription and conventional models. It is recommended that future studies be conducted to examine the nature of price sensitivity as subscription models remain popular in various sectors.
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