1.
Consumer perceptions of prices are also affected by alternative pricing
strategies. Marriott Hotels, for example, has different brands for differing
price points. Building upon the Marriott example, you are to scan the
environment to find examples of a company whose pricing strategy is closely
tied to its branding strategy. Caution: do not just list just the different
price points in the same company such as Ford automobiles.
DQ No.1) Answer:
Consumer perceptions refer
to the psychological state of consumers towards the products or services. Consumer perceptions are affected by several
factors such as products pricing strategies, qualities and branding and so
forth. Good marketers always try to attract new customers and retain the
existing customers for operating the organizations at a profit so that they can
apply the following pricing strategies to survive and compete with their close
competitors.
1. Premium pricing: Premium
pricing strategy refers to the fixation of price in such a way that companies
range the price of the product higher than the competitors. It is applicable
when product is new and includes more product qualities and features in the
products than competitors.
2. Penetration pricing: It
is the pricing strategy in which companies enter into the market with low
pricing than the competitors. And it uses the public awareness strategy to
attract the customers.
3. Economy pricing: It
refers to the strategy of ranging affordable price from low to high in which
marketers try to attract the customers who have low income levels.
4. Price skimming: It
is the strategy where marketers set the higher price at first and after that
slowly decreases after it gains the maximum revenue.
5. Psychological pricing: It
is the strategy used by the marketers by considering the customer psychology.
For example: keeping price of a product is $99, instead of keeping $100.
In addition, by applying
these pricing strategies in the companies like Marriott Group, which has
provided a wide range of hotels for charging different prices to different
product brands. The transportation company in Nepal, “Metro Deluxe” also has
been offering its different services or prices in order to facilitate different
passengers. It has been offering three different brands with different pricing
strategies to attract all customers. One of them is that Normal Metro Deluxe,
it is offering its services with low income passengers. Second of them is that
Metro Deluxe, it is providing its transportation service with medium rage cost,
and third of them is, AC Metro deluxe, it is charging very high prices by
offering its customers more facilities than others.
In a nutshell, consumer
perceptions of prices are not affected by various pricing strategies which most
of marketers use to set up while determining pricing of different products and
services. Thus, it is very important for marketers to know about pricing
strategies to attract new customers and retain the existing ones.
References:
- Kotler, P., Keller, K. L., Koshy, A., & Jha, M.
(2012). A south Asian Perspective Marketing Management. New Delhi: Pearson
Prentice Hall.
- Local mentor: Subash Chandra Baral
2. Choose a service good, such as education,
legal advice, tax advice, or other such services, and map out your perception
of prices and what you consider to be the current actual price. Compare and
contrast their perceptions with the stated or published prices for these
services. You should explain the differences between perception and stated
prices in terms of consumer buying behavior models from Chapter 6 of this text.
DQ No.2) Answer:
Perception can be defined as
a process of selecting, organizing and interpreting information inputs to
produce meaningful picture of something or someone. On the other hand, Consumer
buying behavior models refer to buying behavior of end consumers about what to
buy, when to buy, where to buy and with whom to buy and so forth. These models help
in understanding and analyzing the psychological aspect of the individuals for
buying any product or service. Most of the consumers these days are more aware
and conscious about products or services than ever before.
Any consumers have to pass
through the following consumer buying stages before buying any products or
services. They are as follows:
1.
Need/problem
Recognition
2.
Information search
3.
Evaluation & selection of alternatives
4.
Purchase decision
5.
Post-Purchase behavior
Price perception refers to
individuals’ judgments or perceptions towards particular products’ prices that
could be high or low, and differ in persons to persons. Stated price, on the
other hand, refers to the price that is stated for the goods or services to be
sold, and it is fixed and determined before offering goods or services to its
ultimate users.
In addition to above, we can
make it more clearly by providing a real example. In the context of our
country, Nepal, there are a lot of public and private colleges for providing an
excellent education. However, people have different perceptions regarding its
quality, prices, and facilities and so on. Generally people want to go the
private colleges because their perceptions towards private colleges are
positive and they think it is better way to learn than doing the same thing in
public colleges. The Stated Price of the public colleges is really low but the
actual price people have to pay is high due to not having the services as
expected. Likewise, in the private colleges, the cost is already high and
people do not stop going there to get admitted because people perceive more
values in these colleges than in public colleges. In the consumer buying behavior process,
these factors also equally play a pivotal role in determining what services or
product to buy or consume. People tend
to go the colleges in which their perceptions are met by products or services’
stated prices.
In summary, Consumer buying
behavior is affected by a lot of factors such as perceptions of the price they
pay for the products or services, and the services they actually expect to get
from.
References:
-
Kotler, P., Keller, K. L., Koshy, A., &
Jha, M. (2012). A south Asian Perspective Marketing Management. New Delhi:
Pearson Prentice Hall.
-
Local mentor: Subash Chandra Baral
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