Does the type of power impact customers' expectations of quality and price?

Abstract

This study was conducted to examine whether different types of power (expertise, switching costs) leads to a difference in expected quality and fair price perceptions. Additionally, does sense of power mediate the relationship between types of power, expected quality and fair price estimations. A fitness club was utilized as a service context through an experimental survey to investigate the relationships. Findings depicted subjects with high expertise are more prominent to evaluate the price as fair. The results found no evidence of switching costs nor sense of power to influence subjects expected quality and fair price. Additional findings displayed expected quality to mediate the relationship between expertise and fair price estimations. As none of the hypotheses were supported, the main implication for this study is expertise and the effects on expected quality and fair price. Managers could enhance this by sharing sources of training information or informing the customers regarding how the various equipment can be used in the best manner. Consequently, customers` get a better understanding of the pricesetting based on the quality that is delivered.