How does consumer process and evaluate prices

3. Who are consumers?Who are consumers?

4. Traditional EconomistsTraditional Economists
Define them as:Define them as:
““PRICE TAKERS”PRICE TAKERS”

9. They Interpret that informationThey Interpret that information
in thein the
context of:context of:

11. Formal communicationFormal communication

12. InformalInformal communicationcommunication

14. Extreme Low PriceExtreme Low Price

15. Extreme High PriceExtreme High Price
Is the product Worth?Is the product Worth?
Is likeIs like

17. Guess the Prices ofGuess the Prices of
following Denims:following Denims:

19. Around 1000/-Around 1000/-

21. Around 2500/-Around 2500/-

24. But all are same,But all are same,
Blue jeansBlue jeans
Why does the price differ?Why does the price differ?

25. • LEE and Flying Machine indicate fashion, fit,
and finish.
• Levis sells craftsmanship and Lifestyle.
• Armani sells Exclusivity and status.

26. Its not alwaysIts not always
the cost of product makingthe cost of product making
that decides thethat decides the
Price.Price.

27. Understanding theUnderstanding the
consumer perceptionconsumer perception
Of pricesOf prices
is very important.is very important.

30. • Internal reference, like
comparing with latest
Price they remember.
• External frame of
reference reference like
comparing with the
“Regular Retail Price.”

31. • Fair Price
• Typical Price
• Last price paid
• Upper Bound Price
• Lower Bound price
• Historical Competitor price
• Expected future price
• Usual discounted price

33. Many consumers assume,Many consumers assume,

34. When information aboutWhen information about
true quality is available,true quality is available,

40. ODD Ending PriceODD Ending Price
make youmake you
perceive priceperceive price
lower than actual.lower than actual.
Like 29$ is looked as 20$Like 29$ is looked as 20$
Whereas 30$ as 30$.Whereas 30$ as 30$.

41. Like….Like….

44. These kind of pricing luresThese kind of pricing lures
Customers to buy products.Customers to buy products.

48. Thank You.Thank You.