subject: An Analysis Of Consumer Response To Pricing Strategies [print this page] An Analysis Of Consumer Response To Pricing Strategies
An Overview : The development of a firm or an organization lies in the hands of the consumer. Hence , it becomes essential for the firms and organizations to know the consumer response and their behavior to the pricing strategies . This in turn would affect to improve their marketing strategies. Issues Associated With Consumer Response : The study of consumer response depends on a set of factors. It is based on the behavior of the consumer as follows :
The preference of a consumer so as to how he/she decide on alternatives such as brands , retailers etc.
How the environment (family, culture, media etc.) influences the consumer response and behavior.
The amount of knowledge a consumer has regarding a particular product.
Strategies adopted by the marketer to promote his products.
Applications Of Consumer Response: An evident application of consumer response is for marketing strategy. By understanding what exactly a consumer wants , it becomes easier for the marketers to campaign for that product. Another application is pricing strategies. It is to be kept in mind that the consumer response is directly proportional to the pricing strategy. The higher the pricing strategy, the lower would be the consumer response. The pricing strategy of a product would affect the consumer's decision of choosing the product or brand. The final application of the study of consumer response is that by knowing the behavior of the consumer, we ourselves turn to be better consumers. We can learn from them the factors used before the selection of any product. PRICING STRATEGIES OF AN ORGANISATION: An effective pricing strategy is very important for any firm or organization as it is a medium for revenue. Once a price of a product has been finalized, consumers often oppose its change. The placing of a product in the market or its position also depends on the pricing strategy. Price, in general, can be defined as the resources given up by the received goods. Therefore, it is required to analyze the quantity in hand and also the amount spent. FACTORS DEPENDING PRICING STRATEGIES: Pricing strategies depends on a number of variables. Some firms or organizations tend to maintain a constant pricing. That is, their pricing strategy remains consistent. Their products are maintained at a low cost. The consumer response to such products are high and thus in turn affects the sales of the product. But in some cases , it is noticed that the retailers product products in the market that unless discounted are of high price. To compensate, they have periodic discounts and sales. It is to be noted that high-low and everyday lowering of prices are two of the main strategies implemented in marketing of products by the retailers. Pricing strategies purely depend on the consumer response to products. CONSUMER AWARENESS TO PRICE STRATEGIES: According to research, it has been noticed that consumers do not give much attention to the pricing strategies. That does not mean that consumers are totally insensitive to the pricing strategies. But on an overall basis, they select the most common everyday products quickly without noting its price. This provides the store to maintain an incentive price.
