Consumer Psychology and pricing

Prepared by: Heba Al-KahloutInstructor: Safaa Dallual.

Introduction.

•Many Economists assume that “Consumers purchase without bargaining”.

•Marketers recognize that consumers process price information, interpreting price in terms of their knowledge from “prior purchasing experience, formal and informal communication, and point-of purchase or online resources.

Con…

•Purchase decision based on how consumers perceive prices and what they consider to be current actual price.

•It’s important to Understand how consumers arrive at their perceptions of prices.

So we would discuss…•Reference prices.•Price-Quality inferences•Price endings Or “ Price cues”.

Reference prices.

•Is consumers have a good knowledge of the range of price involved. So he/she can surprisingly few knows specific prices of products accurately.

•When the consumers want to examine the product employ reference prices.

Price-Quality inferences• Many Consumers use price as an indicator of

quality.• Image pricing is especially effective with ego-

sensitive products such as perfumes and expensive cars.

• When the alternative information about true quality is available, price becomes a less significant indicator of quality

• But when those information is not available the price will be the signal indicator of quality.

• Strong demand can lead to high market prices.

Price endings Or “ Price cues”.

•Consumers perceptions of prices are also affected by alternative pricing strategies.

•Many sellers believe that prices should end in an odd number.

•For example: Stereo amplifier priced at $299 instead of $300.

•The marketer conveys the notion of a discount or bargain, suggesting that if a company wants to high-price image.