People - 28.11.2018 - 00:00 

Small, continuous cost units or a complete price?

Price is one of the most important attributes when buying products or services. In his doctoral thesis, Samuel Heer investigated whether the temporal reframing price communication strategy is suitable for public transport and mountain railways.

28 November 2018. Companies have been applying the temporal reframing price communication strategy since the 1980s. For example, the price for an annual subscription is displayed as a monthly payment, while the one-time payment and the total amount to be paid do not change. "In research, no comprehensive investigation into the strategy had been conducted until now, and especially not in personal services," says Samuel Heer. In his doctoral thesis 'Temporal reframing of prices for personal services', he investigated the conditions under which this strategy can be used successfully in the context of mountain railways and public transport.

Price fragmentation works under certain conditions
"Temporal reframing is very context-dependant," says Samuel Heer, "much more than previously assumed." When public transport providers apply the temporal reframing strategy and advertise a subscription in small, ongoing cost units, this generates a greater intention to buy among certain potential customers. Temporal reframing works particularly well among men with a small budget for the activity. The same applies to individuals who use the offer less or who have a negative attitude towards the offer. In the context of mountain railways, however, no positive effect on the intention to purchase could be observed.

Price communication is driven by context
"Temporal reframing should not simply be applied in all contexts without prior consideration," says Samuel Heer. He hopes that his doctoral thesis will make marketing departments and strategic decision-making bodies more aware of the fact that strategies for pricing and price communication are extremely context-driven. The conditions under which it is appropriate to use a given strategy should be carefully considered.

Discover our special topics