Is the Fare Fair at the Fair? Fiona van Iersel MSc Marketing — King's College London Module: Business to Business Marketing (7QQMO507X) Date: 14 June 2026 https://keats.kcl.ac.uk/mod/forum/discuss.php?d=840826 Is the Fare Fair at the Fair? Submitted: 14 June 2026 5:05 PM At first glance, charging the highest possible price within a market segment sounds like good business logic. After all, if customers are willing to pay more, why not maximise profits? It feels like the business equivalent of finding out someone would willingly pay £9 for airport water and thinking, well, capitalism has spoken. However, as Anderson, Wouters and van Rossum (2010) argue, the highest price is not necessarily the best price, particularly when long-term customer relationships, perceived fairness and strategic positioning are considered. In reality, pricing is far more psychological and relational than many firms initially assume. The first question is what the market strategy for the segment actually is. If a company operates in a luxury or prestige segment, premium pricing may act as a signal of quality and exclusivity (Kotler and Keller, 2016). In these cases, a high price itself becomes part of the product experience. For example, luxury brands such as Rolex or Hermès are not simply selling functionality; they are selling symbolism, scarcity and social meaning. A lower price could paradoxically damage the brand because customers may perceive it as less exclusive. However, premium pricing does not automatically mean charging the maximum possible amount. There is a fine but important difference between premium pricing and price exploitation. Consumers generally tolerate higher prices when they perceive superior value, but there is often an invisible line where the relationship shifts from “worth it” to “taking advantage.” This is where price fairness theory becomes relevant. Xia, Monroe and Cox (2004) argue that perceptions of unfair pricing can damage trust and loyalty, even if consumers can technically afford the price. I have noticed this personally with technology products. I have historically remained loyal to Apple despite objectively knowing that competitors often offer stronger technical specifications for less money. Rationally, Samsung may sometimes provide more functionality. Emotionally, however, Apple has consistently delivered simplicity, ecosystem integration and familiarity. Yet there have also been moments where even loyal customers collectively raise an eyebrow at pricing decisions, particularly for accessories or upgrades that suddenly feel detached from perceived value. Loyalty has limits. Even devoted customers eventually start conducting what can be described as an investigative audit of whether the emotional premium is still justified. Rather than relying solely on high pricing, firms can profit from superior value through alternative mechanisms. One important strategy is Customer Lifetime Value (CLV). Instead of maximising margin on one transaction, companies can increase profitability over time through retention, repeat purchases and advocacy (Gupta and Lehmann, 2003). For example, Amazon often competes aggressively on pricing but profits through subscriptions such as Prime, ecosystem lock-in and increased purchase frequency. In this sense, the “best” price may actually be slightly lower if it strengthens long-term customer relationships and overall spending. Another alternative is offering add-on services and complementary products. Service-dominant logic suggests value is co-created with customers rather than embedded solely in a product (Vargo and Lusch, 2004). Businesses can therefore generate profitability through bundled experiences, memberships or enhanced services. In veterinary practice, for example, charging the highest fee for a consultation may not always be optimal. A membership model that includes vaccinations, preventative care reminders, priority booking or concierge collection services may create stronger loyalty and greater long-term profitability while feeling fairer to clients. Many pet owners are willing to spend considerably on their animals, but they also want reassurance that businesses genuinely care rather than simply monetise emotional attachment. Nobody wants to feel their Labrador’s ear infection has become someone else’s quarterly earnings report. Customer expectations of a fair price also matter significantly. Research consistently demonstrates that fairness perceptions strongly influence satisfaction and repeat behaviour (Bolton, Warlop and Alba, 2003). Dynamic pricing can maximise short-term revenue but risks alienating customers if they feel manipulated. Airlines are perhaps the classic example: consumers grudgingly accept fluctuating fares, yet still somehow feel personally offended when the passenger next to them paid half the price for the same seat. Rational economics and human emotion are not always close friends. I would argue that the highest price is only the best price when it aligns with customer value perceptions, segment strategy and long-term business objectives. Pricing should not be viewed solely as a profit extraction tool but as a strategic communication signal about value, trust and brand positioning. Sometimes charging slightly less creates greater profitability over time through loyalty, complementary purchases and stronger customer relationships. In marketing, the most profitable decision is often not asking “How much can we charge?” but rather “How much value can we sustainably create?” References Anderson, J.C., Wouters, M. and van Rossum, W. (2010) ‘Why the highest price isn’t the best price’, MIT Sloan Management Review, 51(2), pp. 69–76. Bolton, L.E., Warlop, L. and Alba, J.W. (2003) ‘Consumer perceptions of price (un)fairness’, Journal of Consumer Research, 29(4), pp. 474–491. Gupta, S. and Lehmann, D.R. (2003) ‘Customers as assets’, Journal of Interactive Marketing, 17(1), pp. 9–24. Kotler, P. and Keller, K.L. (2016) Marketing Management. 15th edn. Harlow: Pearson. Vargo, S.L. and Lusch, R.F. (2004) ‘Evolving to a new dominant logic for marketing’, Journal of Marketing, 68(1), pp. 1–17. Xia, L., Monroe, K.B. and Cox, J.L. (2004) ‘The price is unfair! A conceptual framework of price fairness perceptions’, Journal of Marketing, 68(4), pp. 1–15.