Pricing New Service For Consumer Acceptance: the influence of Consumer Characteristics and Expectations?

In order to shed more light upon the effect of pricing for the successful launch of service innovations (SIs), we investigate the effect of a high versus low launch price on perceived price fairness and, ultimately, adoption intention and two potential moderators. In a experiment we find that the negative effect of a high versus a low launch price on price fairness is moderated by consumer innovativeness and expected future price reduction. Furthermore, we find price fairness to mediate the pricing strategy-adoption intention relationship. Results help managers to better design pricing strategies for SIs.