concept of consumer psychi
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PRICING
AND
CONSUMER
PSYCHI
PRESENTED BY-
ABHIMANYU PANICKER
BIPASHA NIYOGI
SHRADHA THAWANI
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PRICING
Introduction
Price- Sacrifice made by a buyer to avail benefitsprovided by products.
Hence pricing is the process of determining theprice of a product.
Firm needs to set price:
When it develops a new product When it enters new distribution channel or aa
geographical area
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PRICING PROCEDURE
1. Selecting Pricing Objective
Survival
Maximum Current Profit
Maximum Market Share Market Skimming(Product Quality Leadership)
Product Quality Leadership
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2. Determining Demand Pricing directly affects demand
Purchasing Power of consumer
Substitute Products
Competitors
3.Estimating CostsFixed CostVariable costs etc
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4.Competitors
Analyzing competitors price,offers,costs
5.Selecting PricingMethod
•Cost based method
•Customer demand schedule method.
•Comptitor’s price
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CONCEPT OF CONSUMER PSYCHI
C onsumer psychology is a specialty area
that studies how our thoughts, beliefs,
feelings and perceptions influence how
people buy and relate to goods and services .
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One formal definition of the
field describes it as "the study of
individuals, groups, ororganizations and the processesthey use to select, secure, use,and dispose of products, services,
experiences, or ideas to satisfyneeds and the impacts that theseprocesses have on the consumerand society"."Professionals in this field l
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CONSUMER PSYCHI INCLUDES :
How consumers choose businesses, productsand services
The thought processes and emotions behindconsumer decisions
How environmental variables such as friends,family, media and culture influence buyingdecisions
What motivates people to choose one product
over another How personal factors and individual difference
affect people's buying choices
What marketers can do to effectively reach outto their target customers
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UNDERSTANDING HOW CONSUMER ARRIVE AT THEIR PERCEPTION OF PRICES
THE THREE KEY TOPICS
1. REFERENCE PRICE
2. PRICE QUALITY INFERENCES
3. PRICE ENDING
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REFERENCE PRICE
Reference price means comparing and observedprice to an internal reference price ,that consumerremember or to an external frame of reference.
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PRICE QUALITY INFERENCE
Many consumer use price as an indicator of quality.Image pricing is es-specially effective with ego,sensitive products such as perfumes.
When alternative information about true quality isavailable, price becomes a less significant indicatorof quality. When this information is not available,price acts as a signal of quality.
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PRICE ENDING
Consumer perceptions of prices are also affectedby alternative pricing strategies. Many sellersbelieve that prices should end in an odd no.example- customer see a pair of shoes rupees 299
instead of rupees 300.
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