how do consumers process and evaluate prices

Price processing and evaluation by consumers

UNDERSTANDING

NOT JUST A NUMBER ON A TAG

IT CONSISTS OF:• PRICE PAID FOR SOME GOODS OR

SERVICES.• RENTS• FARES• WAGES • COMMISSIONS

ADJUSTED BY:• REBATES• DEALER INCENTIVES

EXAMPLE: JET AIRWAYS

ALLOWS CUSTOMER TO PAY THROUGH:• FLIER PROGRAMS• COMBINATION OF CASH

BUYERS CHOICE

CHANGING PRICING ENVIRONMENTMARKET IN SOUTH-ASIA

AFFLUENT CUSTOMERSTRUGGLERS

ASPIRING CUSTOMER

GET INSTANT PRICE COMPARISONS FROM THOUSAND OF VENDORS

INTERNET:BUYERS DISCRIMINATE SELLERS

NAME THEIR PRICE AND HAVE IT MET

INTERNET:BUYERS DISCRIMINATE SELLERS

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INTERNET:BUYERS DISCRIMINATE SELLERS

INTERNET:BUYERS DISCRIMINATE SELLERS

GAVE PDF READER FREE FREEMIUM STRATEGY

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INTERNET:BUYERS DISCRIMINATE SELLERS

1.SEATS FREE2.PAY EXTRA FOR EVERYTHING ELSE

INTERNET:SELLERS DISCRIMINATE BUYERS

MONITOR CUSTOMER BEHAVIOUR AND TAILOR OFFER TO INDIVIDUALS

INTERNET:SELLERS DISCRIMINATE BUYERS

GIVE CERTAIN CUSTOMERS ACCESS TO SPECIAL PRICES

INTERNET: BOTH BUYERS AND SELLERS DISCRIMINATE EACH OTHER

NEGOTIATE PRICES IN ONLINE AUCTIONS AND EXCHANGES OR EVEN IN PERSON

CONSUMER PSYCHOLOGY AND PRICING

•PRICE TAKERS•ACCEPTS PRICES AT FACE VALUE

CONSUMERS PROCESSES PRICES BY:

•PRIOR PURCHASING EXPERIENCE.

•FORMAL COMMUNICATIONS THROUGH ADS, SALES CALLS , BROCHURES.

•INFORMAL COMMUNICATIONS THROUGH FRIENDS COLLEAGUES.

•POINT OF PURCHASE OR ONLINE RESOURCES.

SAME PRODUCT : DIFFERENT PRICES

PREMIUM BRANDS:HIGHER PRICE

NORMAL BRAND:LOWER PRICE

MID-SEGMENT BRAND:MEDIUM PRICE

CONSUMERS ARRIVAL AT THEIR PERCEPTIONS OF PRICE

1.REFERENCE PRICES : COMPARE PRICES

•FAIR PRICE•TYPICAL PRICE•UPPER/LOWER BOUND PRICE•EXPECTED FUTURE PRICE

2.PRICE QUALITY INFERENCES

•INDICATOR OF QUALITY•SIGNAL OF QUALITY

CONSUMERS ARRIVAL AT THEIR PERCEPTIONS OF PRICE

3.PRICE ENDINGS

•999 BETTER THAN 1000•PRICES ENDING WITH 0 & 5 ARE POPULAR•LIMITED STOCK

CONSUMERS ARRIVAL AT THEIR PERCEPTIONS OF PRICE

EXAMPLE: TATA DOCOMO

TATA CDMA ALLIED WITH NTT DOCOMO TO CAPTURE THE MARKET SHARE

PER SECOND PLAN

INCENTIVES PROVIDED BY TATA DOCOMO

INCENTIVES PROVIDED BY TATA DOCOMO

UNLIMITED GPRS

UNLIMITED FACEBOOK AND WHATS APP

INCENTIVES PROVIDED BY TATA DOCOMO

PER CHARACTER CHARGING SCHEME FOR TEXT MESSAGES

INCENTIVES PROVIDED BY TATA DOCOMO

SUMMARY

•CONSUMERS’ PROCESSING AND REACTION ON PRICE CHANGE MAJORLY DEPENDS ON THEIR MARKET SEGMENT.

•INTERNET HAS CHANGED THE VIEWS AND DOMAINS OF CONSUMERS BY PROVIDING INFORMATION AND COMPARISON BETWEEN THOUSANDS OF FIRMS.

•MARKETERS SHOULD CHANGE THE STATED PRICE BY KEEPING IN MIND CONSUMER PSYCHOLOGY , UPPER-LOWER THRESHOLD , PRODUCT QUALITY AND PERCEIVED PRICE.

AKASH RANJAN PRADHANNIT ROURKELADURING A MARKETING INTERNSHIP BY PROF.SAMEER MATHUR IIM LUCKNOWWWW.IIMINTERNSHIP.COM

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