How to Explain Dimensions of Price Perception?
The price perception is directly related to the success of the company. Although in the end what customer pays is the reality but how it reaches at his decision is what is dependent on the perception. Definition of Price Perception, Because the company is successful in creating the desired perception of the product only then the customer will consider buying it. Hence, it is the price perception that precedes the buying decision of the customer.
This is why price perception is among one of the most important factors while crafting the advertising strategies of the company. For a successful advertising strategy, it is very important to read the minds of the customers.
The concept of price perception helps to understand those psychological factors which are in the minds of the customers and form which they make their purchasing decisions. Understanding the factors by which the seller can influence the perceptions is very important for the companies in order to attract and retain customers.
This can help them to determine the pricing strategy that will ensure their competitiveness in the market and thus, superior financial returns. Role of Price Perception in Consumer Buying Process
The key dimensions of price perceptions are listed below:
The impressive research done in pricing is about the consumer’s quality perception and their quality of products. Consumers perceive price as the prime indicator to presume the quality of the product. Many consumers believe that high priced products attribute better quality and lasts longer. Thus, price signals the quality. The point is very vastly mention in the marketing literature. If prices are mark lower than the level of consumers paying capacity they conclude it to be of low quality. Improvements in quality of products can trigger the mind for the first time and can convert the consumer into a loyal consumer as well. The consumer psychology is also affect and at the end will also affect the market share. The price-quality relationships have not found in the western societies.
It is defined as consumers’ degree of focusing for paying less in buying. The high price conscious consumers tend to do a lot of research work before buying that particular product. The economic theories have also indicated that price has the significant roles in buyers’ preferences. The buyers generally try to maximize their benefits while purchasing and price plays a influential role in their buying process.
This concept follows the price quality evaluation of the consumer. It comprises of what a consumer get on behalf of what they have paid for the products or services. If consumer thinks that quality is less then what they have paid, they tend to get dissatisfies and henceforth stops purchasing that product. The vice-versa of the situation leads to turning them into regular or may be loyal consumer. Consumers who are capable of making this sort of evaluations are call “Value Conscious Consumers” They generally don’t mind paying higher prices if the quality of product justifies it.
This could be define as the consumers being experts about the lowest price stores and starts sharing the information by informing them. These consumers evaluate different aspects of product to justify it with the price bracket into which they are offer and compare it with other stores to get the best benefits out of it. The consumer’s socio-economic character, previous experiences and learning processes play an important role. The price information collect is shape by rational and emotional motives of consumers. These types of consumers are experts in the product information’s and thus may be call as ‘advisors’ by other consumers.
Sales influence consumers’ price perceptions significantly. The consumers generally evaluate their last purchases with the current ones. Sales, price discounts aim to increase the total sales and also create positive purchases evaluation. The best price evaluations can made during the sales or discount prices. Another research has also indicate that young consumers tend to be lesser influence by the sales as compare to those of the older generations.
It is a psychological dimension. Consumers can perceive high price as positive and even as a negative. The high pricing of the product can be perceive as a way of losing the money. Consumers buying these sorts of products generally consider it as a part of their status. They tend to purchase on their emotional moves. A prestigious product is consider to be a symbol of wealth and living above standards. Prestige sensitivity is the factor behind the same and can happen because of difference of socio-economic characteristics of consumers. This concept can be use in developing high quality and distinct product image.
Domestic-Foreign Product Sensitivity
The product sensitivity amongst domestic-foreign product also plays an important role in price perceptions. The place of product manufacturing also influences the the buying behavior and hence leading to think upon the pricing being perceive by consumers as well. Thus this dimension is also necessary to be include into the consumers’ experience of judging the price. Brand recognition, effects the quality and price perceptions. Origin of country is also not untouchable by it and influences the consumer. The products from develop country are generally regrade as the high quality and costly. The domestic and foreign products are also view emotionally and symbolically. This dimension is unique to evaluate and hence included in describing price perceptions.