How do consumers process and evaluate prices

10
CONSUMER PSYCHOLOGY AND PRICING -KARTIK BHARGAVA

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Transcript of How do consumers process and evaluate prices

Page 1: How do consumers process and evaluate prices

CONSUMER PSYCHOLOGY AND PRICING

-KARTIK BHARGAVA

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REFERENCE PRICES

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“Fair Price” (what consumers feel the product should cost)

Typical Price

Historical Competitor Prices

Expected Future Price

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Upper-Bound Price (reservation price or the maximum most consumers will pay)

Lower-Bound Price (lower threshold price or the minimum most consumers will pay)

Usual Discounted Price

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PRICE-QUALITY INFERENCES

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Many consumers use price as an indicator of quality

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Exclusivity and scarcity signify uniqueness and justify premium-pricing

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PRICE ENDINGS

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Consumer tend to process the price “left-to-right” hence, $499 falls in $400 rather than $500 range

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“Sale” signs next to prices spur demand, but only if not overused


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How do consumers process and evaluate prices?

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How do consumers process and evaluate prices

How do consumers process and evaluate prices

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