Developing
Pricing Strategie
s
1of 5
How do consumers process and
evaluate prices ?
Traditionally Consumers
were assumed to be “price
takers”
However
purchase
decisions are based on how
the custom
er perceiv
es prices
How do consumers
arrive at their price
perceptions ?
Reference Price
s
Consumers
compare observed price to an
internal or
external referenc
e pric
e
Possible
Reference Price
s
Fair Price - what they think is fair
Last Paid Price
Upper Bound Price – maximum amount they will spend
Lower Bound Price – amount below which product seems inferior
Competitor Price
Future Price
Usual Discounted Price
Price Quality
Interference
More the price better the Quality
Price Endings
Prices ending in 9 suggest a discount
Prices ending in 0 or 5 are easy to remember
Created by Ronak Jain, NIT Surat, during an internship by Prof. Sameer Mathur,
IIM Lucknow.
www.IIMInternship.com