What Makes a Price Seem Fair/ Unfair: Backgrounds, Factors, Antecedents and Consequences of Perceived Price Fairness and Methods for its Management

A critical activity for many marketing managers is to establish product pricing strategy. To set effective prices, the marketer attempts to predict how consumers are likely to respond to different price levels or price changes. Researchers have established the importance of the psychological underpinning’s of price perception, and have demonstrated that a variety of psychological factors influence consumers` responses to price. To manage pricing decisions effectively, the marketer must be able to understand both economic and non-economic (esp. psychological) responses to various price and price changes. Preceived price fairness (PPF) or unfairness (PPU) has been identified as one of the psychological factors that exert an important influence on consumers` reactions to prices. Therfore, in this article we study and describe: the theoretical principles of PPF and PPU, the most important factors that create PPU, and it`s effects, and finally, the directions for managers to challenge this problem.