Willingness to pay
DESCRIPTION
The maximum amount a consumer would pay for an offering based on the consumer’s perception of the offering’s value.
The maximum amount a consumer would pay for an offering based on the consumer’s perception of the offering’s value.
KEY INSIGHTS
Willingness to pay (or WTP) for an offering, being an indicator of the offering’s perceived value by a consumer, can be viewed as the consumer’s valuation of the gross benefits the consumer perceives in the offering, quantified in monetary terms. In marketing research, WTP can be a practical measure of the strength of a brand as it is indicative of consumers’ attachment to the branded offering.
Willingness to pay (or WTP) for an offering, being an indicator of the offering’s perceived value by a consumer, can be viewed as the consumer’s valuation of the gross benefits the consumer perceives in the offering, quantified in monetary terms. In marketing research, WTP can be a practical measure of the strength of a brand as it is indicative of consumers’ attachment to the branded offering.
KEYWORDS Perceived value, product worth
IMPLICATIONS
Willingness to pay is an important consideration in research into the demand for a wide range of offerings and consumer products in particular. Marketers should seek to understand better consumers’ willingness to pay for their offerings in an effort to manage the demand of such offerings through means not only including pricing but other areas of marketing that are able to enhance and communicate value that is to be perceived by customers.
Willingness to pay is an important consideration in research into the demand for a wide range of offerings and consumer products in particular. Marketers should seek to understand better consumers’ willingness to pay for their offerings in an effort to manage the demand of such offerings through means not only including pricing but other areas of marketing that are able to enhance and communicate value that is to be perceived by customers.
APPLICATION AREAS AND FURTHER READINGS
Marketing Research
Cameron, T. A., and James, M. D. (1987). ‘Estimating Willingness to Pay from Survey Data: An Alternative Pre-Test-Market Evaluation Procedure,’ Journal of Marketing Research, 24, 389–395.
Cameron, T. A., and James, M. D. (1987). ‘Estimating Willingness to Pay from Survey Data: An Alternative Pre-Test-Market Evaluation Procedure,’ Journal of Marketing Research, 24, 389–395.
Services Marketing
Goett, A., Hudson, K., and Train, K. (2000). ‘Consumers’ Choice among Retail Energy Suppliers: The Willingnes-to-Pay for Service Attributes,’ Energy Journal, 21, 1–28.
Goett, A., Hudson, K., and Train, K. (2000). ‘Consumers’ Choice among Retail Energy Suppliers: The Willingnes-to-Pay for Service Attributes,’ Energy Journal, 21, 1–28.
Retail Marketing
Krystallis, A., and Chryssohoidis, G. (2005). ‘Consumers’ Willingness to Pay for Organic Food: Factors that Affect it and Variation per Organic Product Type,’British Food Journal, 107(5), 320–343.
Krystallis, A., and Chryssohoidis, G. (2005). ‘Consumers’ Willingness to Pay for Organic Food: Factors that Affect it and Variation per Organic Product Type,’British Food Journal, 107(5), 320–343.
Consumer Behavior
Prelec, Drazen, and Simester, Duncan (2001). ‘Always Leave Home without it: A Further Investigation of the Credit-Card Effect on Willingness to Pay,’ Marketing Letters, 12(1), February, 5–12.
Prelec, Drazen, and Simester, Duncan (2001). ‘Always Leave Home without it: A Further Investigation of the Credit-Card Effect on Willingness to Pay,’ Marketing Letters, 12(1), February, 5–12.
BIBLIOGRAPHY
Wertenbroch, K., and Skiera, B. (2002). ‘Measuring Consumers’ Willingness to Pay at the Point of Purchase,’ Journal of Marketing Research, 39, May, 228–241.
Wertenbroch, K., and Skiera, B. (2002). ‘Measuring Consumers’ Willingness to Pay at the Point of Purchase,’ Journal of Marketing Research, 39, May, 228–241.
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