Improve your pricing strategy to match consumer behavior

Posted on February 21, 2022 by Cheapest Assignment

Order Now
Assessment 3: Individual Reflective Journal - Individual Assignment

Consumer behaviour refers to the behaviour of consumers in the market and the factors that affect these behaviours (Chen-Yu, 2018). This article focuses on how prices affect consumer behaviour. In traditional demand and supply economics, people understand that rising prices lead to a decrease in demand, while an increase in the supply of goods and services leads to a decrease in prices and vice versa. However, contrary to theory, certain factors may make the reverse calculation more accurate. Consumers’ rational decisions on products or services in real life are based on consumer utility theory (Forsen, 2019). Therefore, consumer behaviour is inseparable from consumption activities other than purchase, but price plays a more critical role in obtaining goods or services. Therefore, all these factors will be thoroughly discussed here in terms of price and consumer behaviour.

The Biggest Online Platform

As mentioned earlier, pricing is a crucial factor affecting consumer behaviour. It may be an increase or decrease in prices. In consumers’ eyes, rising prices make products look expensive or luxurious and may be favoured by some consumers who consider high-quality and therefore luxurious. In a sense, luxury goods are considered sustainable because they are perceived to be of high quality, durable and can appreciate in value. The consumers’ utility relies on personal needs rather than needs, making luxury goods regarded as rewards rather than necessities (Forsén, 2019). However, some people see it as a waste of money and may choose to buy the same product elsewhere cheaply or choose another product.

Usually, expensive goods or services are associated with quality, and consumers will not have time to taste alternatives. Sometimes the quality may be the same, but the packaging plays a role and causes the price difference. According to Bray (2008), to act economically, consumers need to know consumption options, analyze each alternative, and make the most appropriate decision. These decisions do not count anymore, as they are considered an unrealistic description of consumer decision making. Consumers rarely have scarce information and the urge or time to make the right decisions about commodities and services. They are often affected by more irrational influences, such as social relationships and values ​​(Forsen, 2019). Frequently, people describe individuals as satisfaction seekers rather than choosing the best option. Due to the perceived quality, high prices will lead to increased sales, leading to increased profits.

Removal of chromium using biochar PRBs

On the other hand, high prices may hinder the consumption of goods and services. Consumers rarely consume luxury goods, which means that they do not consume goods as frequently as other goods. This is proved in the “consumer behaviour theory” under the “economic man” approach. Due to the perceived quality, high prices will lead to increased sales, leading to increased profits. On the other hand, high prices may hinder the consumption of goods and services. Consumers rarely consume luxury goods, which means they do not consume goods as frequently as other goods. Product price increases described as effective in terms of cost savings are another factor that affects consumer behaviour. After purchase, the product’s efficiency explains the result of the purchase from the customer’s point of view. This pricing is based on customer pricing because it uses the value of products or services provided to some customers as the main factor in determining the price. Consumers realize that the current high prices are not commensurate with the benefits of tomorrow’s products because of the substantial cost savings, which makes people eager to make money now. Explaining the product’s details to inform customers of its advantages, one can make oneself aware of their capabilities. This cognition is explained in the “Cognitive Psychology Method”, where people can identify products, process information, and decide to buy products. If there is no information, people will not be aware of the product and will continue to shop normally. According to Sternberg (1996), cognitive psychology has discovered and generated several levels of thinking modes that are the basis of interpersonal relationships and processes, like perception, memory, emotions, thinking, learning, and motivation. Therefore the second pricing hack tries to make a consumer remain with a vivid analysis of benefits over cost in the long run.

Professional Development Plan on HR

According to Lee et al. (2018), price discounts are the most common marketing strategy to attract customers to provide additional value or incentives. It encourages consumers to buy promotional products immediately. Regarding discounts on prices, with the price-quality-value and average-terminal models in mind, some consumers will realize that products with higher discount rates are of inferior quality. Researchers discovered that the effect of discounts on product or services that are perceived differently are inconsistent. Lee et al. (2018) stated a favourable relationship between high price discounts and higher product quality.

On the contrary, other researchers stated a negative correlation between high price discounts and low perceived quality. The two comparisons indicate the instantaneous influence of prices on goods and services against perception of consumption. Therefore, according to the third pricing hack, it good to stack prices from low to high because there is a possibility to get more returns through sales(Hardisty et al.,2020). However, discounts on prices have emotional effects that give positive feelings. Exciting emotions, especially for clothing products, will affect consumers’ perception of products and shopping experience. Price promotions are thus effective if the benefits of this, price promotions are a type of product, for example, when products are hedonic and utilitarian, an. Consumers will accept promotions on prices that come with hedonic products rather than price promotions that come with actual benefits when buying hedonic products. Alternatively, the stimulating promotion effect is vital for products that are hedonic. Clothing products have a high value which translates the pleasure associated with the product. Besides the product’s pleasure, consumers may also feel that the shopping value associated with the price discount they enjoy is high when buying clothing (Lee et al., 2018). The impact of discount pricing may play an essential role in consumers’ perception of playing clothing and value.

Tenement House Journal

In short, pricing will always determine market demand and supply, whether it increases or decreases. Also, the purchasing power of consumers affects the speed of purchasing products and services. This article discusses pricing, but many other factors also affect consumer behaviour, such as norms, traditions, peers, brands, and packaging. However, all these factors are designed to influence consumers’ psychology of purchasing products or services. Therefore, the marketing or salesperson’s job is to invent or innovate ways to attract customers because customers are businesses.

Cited work.

Bray, J. P. (2008). Consumer behaviour theory: approaches and models.

Forsén, J. (2019). Sustainable Consumer Behavior and Its Impact on the Luxury Industry.

Hardisty D.J, Allard.T, D. Griffin. (2020). Upgrade your pricing strategy to match consumer behaviour. Pricing Article.1-4

STERNBERG, R. J., 1996. Cognitive Psychology. Orlando: Harcourt.

 Lee, J. E., & Chen-Yu, J. H. (2018). Effects of a price discount on consumers’ perceptions of savings, quality, and value for apparel products: Mediating effect of price discount affect. Fashion and Textiles5(1), 1-21.

Order Now