‘Call for prices’: Strategic implications of raising consumers' costs

‘Call for prices’: Strategic implications of raising consumers' costs

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Article ID: iaor2010766
Volume: 29
Issue: 1
Start Page Number: 158
End Page Number: 174
Publication Date: Jan 2010
Journal: Marketing Science
Authors: , ,
Abstract:

Many consumer durable retailers often do not advertise their prices and instead ask consumers to call them for prices. It is easy to see that this practice increases the consumers' cost of learning the prices of products they are considering, yet firms commonly use such practices. Not advertising prices may reduce the firm's advertising costs, but the strategic effects of doing so are not clear. Our objective is to examine the strategic effects of this practice. In particular, how does making price discovery more difficult for consumers affect competing retailers' price, service decisions, and profits?

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