Understanding Customer and Buyer Behavior Aug 23, 2012

Psychological price phenomena

- “irrational” effects of price on customers’ buying behavior

- customary prices

- price lines

- odd prices

*price perception (how people

encode price information in their

minds)

*price cognition (how people process

the encoded price information)

Price Awareness

- the ability of buyers to recall prices paid

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- reasons for recalling or recognizing prices paid:

concern about prices

involvement with the product

the amount of attention they give to the

selection

- evaluative judgments of price:

good/bad

favorable/unfavorable

expensive/inexpensive

Remembering versus Knowing

Remembering requires consciously recollecting having encountered a piece of information.

Knowing involves a sense of familiarity towards a previously encountered item, experienced without conscious recollection of the exposure event.

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