Influencing Factors on Price Tolerance of Internet Customers

Price is a major motive that engages consumers in shopping websites, and although price tolerance has gained increasing attention for its importance on pricing strategy, related literature on e-commerce lacks a conceptual model probing into factors that influence customers’ price tolerance. This paper proposes an integrated conceptual model, and empirically tests the model using data collected from online customers. The findings show that perceived value is the most influential factor on price tolerance, and the remaining factors that influence price tolerance are in the sequence of customer satisfaction, commitment, and trust. By dividing customers into two groups according to their monthly shopping frequency, this study finds that the perceived value of the high-frequency shopping group does not have a significantly positive influence on commitment, and the customer satisfaction of the low-frequency shopping group does not have significantly positive influence on price tolerance. The findings of this research provide related shopping websites with meaningful suggestions and references on pricing strategies.