How Do Consumers Process And Evaluate Prices?

Professor John Maule from the University of Leeds describes new research into the way that consumers choose a product.

First of all let me explain why people like to buy a items/goods those are higher in price’s. Those who are purchasing the target brand items are making a selection, spending only a few seconds before moving on. This leads me to suggest that consumers are not paying much attention to prices. On the other hand, we know from scanner data that consumers respond a great deal to price changes. It appears that rather than looking at prices per see on every shopping occasion, consumers may check prices only periodically (say, every ten shopping times) or rely on cues in the environment—e.g., buy whatever brand is on sale. Other, thing which I realized is that different people live in a different

Potential or existing customers can consider product prices high, low or fair, thereby regulating the active demand for the products of the company.

In this section, I will break down the common consumer in attempt to understand what sways him/her into purchasing certain goods—especially those that “they do not need” In addition, I will discuss how consumers determine a certain product to be “worth it”

the psychological meaning of a product to customers. On the other hand, cost is related

Although they are able to somewhat control prices due to their product differentiations and their status as a brand name, they will make profits by lowering price. However the danger in lowering prices is that with each additional product, utility will drop for the consumer. Therefore, firms must be careful in balancing consumer demand with the projected consumer utility.

Every person is a consumer in some way or another. Maybe it’s fuel for the automobile that is used to reach work, or maybe it is electronics such as iPad, mobile phone, or any other good or service. Prior to making most any purchase, individuals have to make a decision by doing some type of cost/benefit analysis. For example, just buying a loaf of bread can be difficult as there are so many choices of brands, types, and prices. Depending on what you will use the bread to hold, a hot-dog bun maybe the right choice, but then a decision has to be made if it is to be white or wheat. Wheat may taste better, but is it worth the dollar price difference? Another example would be using an internet site such as Angie’s List to search, select and schedule a service.

The author uses an arbitrary coherence to show that it influences consumers’ decision making process.

Research Challenge Identifying the optimal price for a new product is a critical step in the innovation process – and correcting the price of an existing product is a necessary component of successful brand management. With the wide range of pricing research techniques practiced in the industry, it is not always clear which technique best addresses the business issue at hand. This paper describes the most common methods used for consumer goods pricing research and offers guidelines on when – and when not

Consumers’ decision to purchase a product in the market is contributed by a variety of reasons. Some customers purchase a commodity because it is satisfying their taste expectations and its price is friendly to their pockets. Other customers decide to buy a product because to is prestigious but not because of needs or satisfaction (Screpanti, and Zamagni, 2005). Marshall Keynes and Thorsten Veblen who are proponents of theories on behavioral economics had views on why consumers purchase certain products in the market. Marshall and Veblen had a psychological similarity in their idea as well as differences in their point of

Consequently, once you understand your costs and your maximum price, you can make an informed decision about how to price your product or service. (Allen, 2012)

The automobile may cost $100,000, and if some customers perceive the particular price to be reasonable price for the automobile, they will purchase it based on their perception and not because of the fact that marketers set the price of the automobile as $100,000. Same customer may feel that $30,000 for different automobile is too expensive even though he or she felt that $100,000 for the automobile was reasonable for them because they perceive each products differently. Kotler and Keller (2012) also mentioned that customer are less sensitive to price of the product when they believe that 1) there are not too many similar products in the market that can replace the quality of the given product; 2) the high price of the product can be justified; 3) stated price of the product is just a small cost of obtaining unique product for the life time.

A consumer buying in unfamiliar markets is usually based upon price. Prices can prevent purchase because the buyer may think that it is not a reasonable offer for the product.

Intention to buy may be referred as a reflection of real purchase behavior [41]. The greater the purchase intention is, the greater a consumer’s desire to buy a product or service, it occurs when the consumers perceive product preference in the stage between making purchase evaluation and the actual purchase behavior [41]. Purchase intention is stimulated by external factors of decision-making, personal characteristics, consumer previous experience and customers’ preferences by experience [41].

Buying process starts with the buyer aware of the needs. Buyers feel there is a difference between the actual state and the desired state. Demand can be derived from stimuli inside and outside of the subject. In the case of the agent inside, one of the needs of ordinary people, such as hunger, thirst, sexual increased to a certain degree and become an urge. Due to previous experience, we understand how to deal with this impulse and its engine will be directed to the media can satisfy the urge. Or a need may arise from a stimulus from the outside, such as from the media, advertising, friends, social, people passing by other large programs noodle soup and smell aromatic flavor delicious pho rises stimulated by making them feel hungry. A woman saw a beautiful dress her neighbors watch a program or advertise a new perfume, ... All these stimuli that may suggest a problem or needs. Marketers at this stage to identify the circumstances often make consumers quickly understand the problem. They should study the context of its intended consumers to find out what made sense forms arising problems or needs, explains see what created them, and how they impact the consumer make the choice to go to buy a certain product.