Dimensions of price satisfaction: a study in the retail banking industry

Purpose - The purpose of this paper is to explore the dimensionality of price satisfaction. It argues that price satisfaction is composed of several dimensions (price transparency, price-quality ratio, relative price, price confidence, price reliability, and price fairness) and that companies should consider these dimensions when monitoring customer satisfaction. Design/methodology/approach - Based on a theoretical discussion of the price dimensions, a questionnaire is developed that measures customer satisfaction with individual price dimensions. Using regression analysis the impact of price satisfaction dimensions on overall price satisfaction is measured, using a sample of 160 students. Findings - The results show that price satisfaction can be conceptualized as a multidimensional construct and that five dimensions influence overall price satisfaction. The application of the questionnaire allows for measuring price satisfaction in firms. Research limitations/implications - The paper introduces price satisfaction as a multidimensional construct and the study empirically supports the hypotheses. The student sample, however, restricts generalizability and more studies are needed to test the validity and reliability of the questionnaire. Practical implications - Based on the measurement of price satisfaction, managers are able to identify the drivers of price satisfaction, their satisfaction and relative importance in different market segments and, consequently they are able to take the right measures to increase customer satisfaction and loyalty. Originality/value - So far price satisfaction has been treated as a one-dimensional construct. This paper contains a theoretical argumentation for why price satisfaction should be treated as a multi-dimensional construct consisting of several dimensions, i. e. price-quality ratio, price fairness, price transparency, price reliability and relative price. These dimensions constitute the determinants of overall price satisfaction.