Marketing Strategies for Pricing Services: An Application in the Deregulated Financial Services Industry
Krumske, William Frederick, Jr
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https://hdl.handle.net/2142/70471
Description
Title
Marketing Strategies for Pricing Services: An Application in the Deregulated Financial Services Industry
Author(s)
Krumske, William Frederick, Jr
Issue Date
1987
Department of Study
Business Administration
Discipline
Business Administration
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Business Administration, Marketing
Abstract
Pricing is the only marketing variable which contributes directly to revenue yet pricing strategies research for service industries has been virtually nonexistent to date. This dissertation examined marketing strategies for pricing financial services in the post deregulation environment. It was posited that household's responsiveness to price was effected by (i) their prior deposit behavior, (ii) current price or interest rate, (iii) prices from competing financial institutions, and (iv) their attitudes about switching financial institutions.
Telephone interviews with 142 households in two distinct markets were conducted to collect attitudinal measures for three types of switching costs: monetary, temporal, and risk/uncertainty. These data were combined with actual household deposit behavior for four different financial services from their current financial institution and pricing data from 13 competing financial institutions. Three econometric models for the combined and individual markets were estimated via a system of seemingly unrelated regression equations.
The results showed that only prior deposit behavior is positively and significantly related to price responsiveness for households in both markets; and, no significant difference between the three different econometric models was found. Based on these findings, strategic implications for financial services pricing in the post-deregulation environment are discussed.
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