1. How do consumers process and evaluate prices? (Chapter 13) (Anurag Kar)
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Transcript of 1. How do consumers process and evaluate prices? (Chapter 13) (Anurag Kar)
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How do consumers process and evaluate prices?
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By,
Anurag Kar
B.Tech. Student
Department of E and ECE
IIT Kharagpur
Based on Chapter 3: Developing Pricing
Strategies and Programs
Of
Marketing Management: A South Asian
Perspective
By Kotler, Keller, Koshy and Jha
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Customers today have many ways
of differentiating between sellers
because of
THE INTERNET
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Customers
Then Now
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Buyers today can:
1. Get instant price comparisons between vendors.
2. Name their price and have it met.
3. Get products for free.
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Examples
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Earlier
Buyers were “price takers”.
They accepted prices at face value.
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Now..
Buyers process various
information and access various
options.
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Let’s understand consumers’
perception of prices with the help of
3 sub topics
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Reference Prices
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Consumers often can’t accurately
recall specific prices.
While examining products, they
employ reference prices.
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They compare an observed price to
an internal reference price or
external references such as
“posted retail price”.
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Price – Quality Inferences
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Consumers often use price as an
indicator of quality.
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₹ 3000
It’s so
sophisticated.It has to be
good.
Wow!
This shirt is so good.Because it’s
expensive.
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₹ 300
It’s so
dull.It’s cheap.
Ew!
This shirt is bad.Cheap shirts
are never good.
.
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Price Endings
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Many sellers believe in ending
prices with a ‘9’.
Such as ₹ 299 or ₹ 499 for a
commodity.
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This is because people tend to
process prices from
₹ 2 9 9Left Right
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₹ 2 9 9
Ends up being in
the 200 range
Rather than the
300 range.
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Companies who want to portray an
expensive image on the other hand
should AVOID such pricing because
of the risk of looking cheap.
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Recap
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Pictures Sourced from:
www.flickr.com
www.pinterest.com
http://commons.wikimedia.org
www.theguardian.com
Fonts Sourced from:
www.fontsquirrel.com
Based on “Marketing Management: A South Asian Perspective”
By Kohler, Kelter, Koshy and Jha
Credits