Based on Chapter 13 of Marketing Management: A South Asian Perspective by Koller, Ketler, Koshy and Jha.

1. How do consumers process
and evaluate prices?

2. 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

3. Customers today have many ways
of differentiating between sellers
because of
THE INTERNET

4. Customers
Then Now

5. Buyers today can:
1. Get instant price comparisons between vendors.
2. Name their price and have it met.
3. Get products for free.

6. Examples

7. Earlier
Buyers were “price takers”.
They accepted prices at face value.

8. Now..
Buyers process various
information and access various
options.

9. Let’s understand consumers’
perception of prices with the help of
3 sub topics

10. Reference Prices

11. Consumers often can’t accurately
recall specific prices.
While examining products, they
employ reference prices.

12. They compare an observed price to
an internal reference price or
external references such as
“posted retail price”.

13. Price – Quality
Inferences

14. Consumers often use price as an
indicator of quality.

15. ₹ 3000
It’s so
sophisticated.
It has to be
good.
Wow!
This shirt is so good.
Because it’s
expensive.

16. ₹ 300
It’s so
dull.
It’s cheap.
Ew!
This shirt is bad.
Cheap shirts
are never good.
.

17. Price Endings

18. Many sellers believe in ending
prices with a ‘9’.
Such as ₹ 299 or ₹ 499 for a
commodity.

19. This is because people tend to
process prices from
₹ 2 9 9Left Right

20. ₹ 2 9 9
Ends up being in
the 200 range
Rather than the
300 range.

21. Companies who want to portray an
expensive image on the other hand
should AVOID such pricing because
of the risk of looking cheap.

22. Recap

25. 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