Developing

Pricing Strategie

s

1of 5

How do consumers process and

evaluate prices ?

Traditionally Consumers

were assumed to be “price

takers”

However

purchase

decisions are based on how

the custom

er perceiv

es prices

How do consumers

arrive at their price

perceptions ?

Reference Price

s

Consumers

compare observed price to an

internal or

external referenc

e pric

e

Possible

Reference Price

s

Fair Price - what they think is fair

Last Paid Price

Upper Bound Price – maximum amount they will spend

Lower Bound Price – amount below which product seems inferior

Competitor Price

Future Price

Usual Discounted Price

Price Quality

Interference

More the price better the Quality

Price Endings

Prices ending in 9 suggest a discount

Prices ending in 0 or 5 are easy to remember

Created by Ronak Jain, NIT Surat, during an internship by Prof. Sameer Mathur,

IIM Lucknow.

www.IIMInternship.com