How Customers Perceive a Price Is as Important as the Price Itself


All too often, companies will change their pricing very subtly to either increase margin or move more product.  When they do this, often time’s consumers will not even notice.  What companies must do is ensure that their prices are in-line or below that of their competitors.  Where a company positions themselves among competitors is also a very key factor in consumer perception and expected sales.  For example, if a luxury goods company were to price lower than the competitors consistently, they may be perceived as lower quality, and will not attract the intended clientele to the brand. 
            This relates directly to some course discussions and some readings in Chapter 11.  When competitive behavior is discussed, it brings about the discussion of Levi’s jeans.  In the United States, Levi’s are a very normal, no-nonsense, every day brand of jeans that are priced accordingly.  These jeans are sold at outlet stores and at large big-box retailers in the United States.  Overseas, the jeans are seen as a very premium brand, and are often sold in boutiques and galleries.  The prices these jeans get internationally are much higher than the prices domestically.  Sometimes the prices are $50 more on average.
Heda S, Mewborn S, Caine S. How Customers Perceive a Price Is as Important as the Price Itself. Harvard Business Review Digital Articles [serial online]. January 3, 2017;:2-5. Available from: Health Business Elite, Ipswich, MA. Accessed April 23, 2018.

Comments

  1. AnonymousApril 23, 2018 at 4:31 PM

    Levi provides a great example as to how pricing effects a brand's image. I think, the low-price strategy Levi has been using in the United States has greatly decreased the perceived value in minds of American consumers.

    ReplyDelete
  2. TimApril 28, 2018 at 8:37 AM

    Great article Cam! It seems like these days, consumers are willing to pay a higher price if the increase in quality is substantial enough. It all comes down to value in the end!

    ReplyDelete

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