W10-11 consumer behavior

Perceived Value

How pricing impacts customer pricing decisions based on the customer's internal assessment of worth.

Trust and Transparency

A factor in pricing decisions that relies on the honesty and clarity of the price presented to the consumer.

Positioning in the market

How a brand or product is placed in the market relative to competitors through its pricing.

Cost-Plus Pricing

A strategy for tangible products where a fixed percentage is added to the production cost to determine the final price.

Competitive Pricing

Setting prices based primarily on the prices of competitors.

Penetration Pricing

Setting a low initial price for a tangible product to enter a market and attract customers quickly.

Premium Pricing

Keeping the price of a product high to encourage a perception of high quality or exclusivity.

Discount Pricing

Reducing the price of a product to increase short-term sales or clear inventory.

Value-Based Pricing

A service pricing strategy where the price is set based on the perceived or estimated value to the customer rather than the cost.

Competitor-based pricing

a strategy where your price points are heavily influenced by those of your competitors

Tiered Pricing

A service strategy offering different packages at various price points to meet different customer needs.

Hourly Pricing

A service pricing method where the customer is charged based on the amount of time spent on the task.

Project Pricing

Charging a flat fee for a specific, defined project or service output.

COST

While fixing the prices of a product, the firm

should consider the cost involved in

producing the product. This cost includes

both the variable and fixed costs. Thus,

while fixing the prices, the firm must be able

to recover both the variable and fixed costs.

COMPETITION

While fixing the price of the product, the

firm needs to study the degree of competi-

tion in the market. If there is high

competition, the prices may be kept low to

effectively face the competition, and if

competition is low, the prices may be kept

high.

CONSUMERS

The marketer should consider various

consumer factors while fixing the

prices. The consumer factors that

must be considered includes the price

sensitivity of the buyer, purchasing

power, and so on.

Government Control

An external factor that can regulate or influence the pricing of goods and services.

ECONOMIC CONDITION

The marketer may also have to consider

the economic condition prevailing in the

market while fixing the prices. At the time

of recession, the consumer may have less

money to spend, so the marketer may

reduce the prices in order to influence the

buying decision of the consumers.

Channel Intermediaries

Middlemen in the distribution process whose costs and margins affect the final price of the product.