The association between consumer satisfaction and price tolerance is of great interest to both
academics and management because it involves one of the most powerful marketing tools in all
business practices – price. It is well accepted that price plays a significant role in forming consumer
purchase/repurchase intention which, in turn, leads to ultimate purchases that determine a
firm’s sales and profits (Han et al., 2001; Jones & Sasser, 1995; Mittal & Kamakura, 2001;
Reichheld, 1996). Despite the popular notion that satisfied consumers exhibit high price tolerance,
there are few empirical studies testing this proposition in a market where maintaining a
certain level of consumer satisfaction is a necessity rather than a competitive advantage.