Consumer Pricing
Consumers have on several occasions questioned the price of products in relation to their value. Quality, use and importance, are influential aspects that determine the way consumers respond to a particular product. On the other hand, manufacturers and retailers are more oriented towards increasing customer satisfaction by producing quality goods at affordable prices. However, affordability is not supposed to affect the company’s expected profits. Companies may therefore fail to meet the consumer expectation on price because of the costs incurred during the production of their products. Since consumers are the most important assets to a company, the price of goods should reflect the value that consumers are willing to pay. It should therefore be the responsibility of every company to ensure that pricing reflects value without compromising on the expected profits.
In some of my shopping examples, I felt cheated having to buy a pendant light at a cost of $230. Firstly, the decorations that were on the pendant light were not properly furnished and its size was smalle...
A Couple of Squares should price their products based on customer value since there is no relationship between customers’ value for a product and the company’s costs. A Couple of Squares currently uses a cost based pricing system. Using a cost based pricing system can undercut profits due to customer value. If customers are willing to buy cookies from A Couple of Squares for twenty dollars and A Couple of Squares is only charging five dollars, they are losing out on a significant amount of profit. Basing pricing on customer value would also keep customers satisfied. Customers would be satisfied since the company is focusing on their individual needs. If the company prices their products based on customer value, the customer will be willing to buy the product because it is at a price they are willing to pay. Therefore, pricing based on customer value would maximize profits as well as customer
Setting prices too high would discourage purchasing and setting prices too low negatively affects revenue. While several pricing strategies exist, the use of a value-based pricing system, as implemented at Cabela’s, offers an optimal strategy that meet both customer expectations and company requirements.
The focal article I chose is Dynamic Pricing: The Future of Ticket Pricing in Sports by Patrick Rishe published on January 6th, 2012 through Forbes. Pricing is an important component of the marketing mix because it is the element where managers have expectations of customers paying their money to the organization (Kopalle, 2009). Compared with other elements of the marketing mix, pricing has the advantage because there is a high level of flexibility. The flexibility is because prices change continually (Smith, 2008). The opportunity of quick price changes also has disadvantages. For much of the 20th century, the vast majority of sport managers employed one of two pricing strategies: the one-size-fits-all approach, where every ticket price
When comparing two different ways of shopping most people do not even think about the difference, they do both and not even realize it. In today's society people shop while at work, after work and on the weekends, whenever time permits. Stop and think how can I get more time in the day for family or just myself? The best way to figure that out with all the recourses we have is to go into a store and spend time looking through racks and waiting in endless lines to just purchase something. I compared going into a store verses online shopping; to see which one will save you time and money.
Panta Anjila 12215143 Assignment 6-2 Opinion paper on “Is Price Gouging Morally Wrong “ Price gouging cannot be said morally wrong only by evaluating few situations .All of the vendors involved in the distribution of goods and services at the time of disaster do not intend to maximize their profit. Some of them sell goods in the time of crisis with good intention as well .Therefore ,
Price elasticity plays an important role in the lives of consumers. The price elasticity of demand is the sensitivity of the demand for a product when its price changes (McConnell, Brue, & Flynn, 2009)iv. Cafes like Panera Bread refuses payments from customers and politely asked them instead to “take what you need, and leave your fair share” (Strom & Gay, 2010)v, resulting in more people getting goods like food at a fair price that they are willing to pay. Based on the income elasticity of demand, consumers can get a better and healthier life as they will buy things with better quality as their income rises. People will go to Italiannies for pizza and not to Pizza Hut as Italiannies offers a better, tastier, healthier and wider variety of choices, even when it is more expensive. With cross elasticity of demand, consumers can get the same quality product at a cheaper price as the rivalry between substitute goods will result in price reduction or improved quality. Consumers get to travel by MAS Airlines at a cheaper price as the rivalry between MAS and other airline companies has caused its price reduction (Gunasegaran, 2011)vi. Consumers with a low budget can also buy what they need. Consumers can get more value from a package offer when buying complementary goods as they “go together”, for example: McDonald's McValue Lunch which comprises of a burger, fries, and soft drink, all for only RM5.95 onwards (My Food Fetish, 2009)vii. With this, consumers can get convenience when buying certain products.
Price wars have racked industry after industry in recent years: from personal computers to mobile phones, from fast-food restaurants to airlines, from grocery retailing to computer software, from beers to frozen diet dinners, from automobile tires to disposable diapers, from detergents to underwear. All too often, there are no winners and few healthy survivors. Price wars indeed represent one of the extreme forms of competitive interplay in the market place, causing great losses. On the one hand, firms take a blow in terms of ability to innovate, consumer equity, and margins; they may forego their competitive advantage, fall victim to substitutes, and even face bankruptcy. On the other hand, consumers, benefit from lower prices in the short run. In the long run, however, they may develop unrealistic reference prices and suffer from lower quality products in the long term. In a broader contest, society may suffer from suboptimal allocation of resources.
Further Kim (2006) stated that "fairness of price is a psychological factor that plays an important role in the customer’s reaction to the paid price". According to the different research price of any product can standard of the brand or vice versa (Turel et al. 2006). Many researchers from different sector such as management, marketing, and economics study price from different aspect which is behavioural, managerial, and quantitative perspective. Despite being an important indicator influencing consumer decision-making and buying behavior, price fairness has just recently become one of the emerging agendas in price literature (Bolton, Warlop, & Alba, 2003). Kotler and Armstrong (2010) said that price is the sum of the amount that consumers trade for the goods or service. Recent research efforts have isolated several factors that influence consumers' price unfairness perceptions as well as potential consequences of these perceptions (Bolton et al.(2003); Vaidyanathan and Aggarwal（2003); Xia et al.(2004). Jacoby and Olson (1977) defined objective price as “the actual price of a product or service”. According to Stanton, Micheal and Bruce (1994) they define price as the total sum of money or goods needed to get another combination of products. From the researcher based on marketing
The consumer products’ is a universal and developed industry; it is considered highly competitive with an astonishing increasing number of competitors providing distinctive kinds of the identical product while contesting for the prices. The most important aspect in this industry is innovation and the quality of the products that play a main role in the success of the product itself. Moreover, the individual consumer does not have the bargaining power to control the prices of the products in the market, however the retail chains and the supermarkets have the power since the switching cost is low in most of the cases.
2. Today marketers can collect and analyze data about consumer behavior, one person at a time; this is the relationship approach to marketing.
Price is the values entirety that consumers trade for the advantages of having or utilizing the product or services. Different places and cultural have different spending culture. Therefore the price has to be relevant according to the product offer because it can reflect the image of a
price as the major decision-making tool for customers (“Global Consumer Electronics”, 2013). This lack of
... concept is inadequate. The concept according to majority of retailers is just dressing a window, or just an unnecessary expenditure. The competitors’ today have an astonishing retail design stock and will have to compete purely on master merchandising and the technological edge.
Whether these items are necessities or even a splurge item. Trips to the store are made for a reason and when you go there will always be the impulse buyer, the list maker, and the bargain hunter. Each type has a different method and these methods are being used to shop, and they are our personal ways of shopping. You will come across many different types of shoppers. You will now realize what kind of shoppers these people you encounter are. Every shopper has a different personality when it comes to shopping as well. Some can be good as well as bad. Shopping is a fun thing regardless. Almost every individual enjoys it. We all have had something we 've been excited to buy. These kinds of shoppers can be found anywhere products are being
Every consumer has a unique way of measuring benefits versus costs and will sometimes pay for higher quality items and other times buy the low costs items, depending on which has the highest value to them.