Price

Question 1

What is the price of a product?

Answer 1

-not just price of product on shelf, but also delivery, discounts
-cost (time and effort) c is willing to go to in order to buy product

Question 2

What are the pricing strategies?

Answer 2

-new product might be set v low- undercut competition and reach wider selection of market
=expectation is that consumers will permanently switch to the new brand= penetration strategy
-but if attempt to raise price= c will feel product less vfm than competitors

Question 3

Consumers are strongly influenced by price when making their purchase decision. Give examples

Answer 3

-brain scans show c’s get more pleasure from a wine they think is more expensive than cheaper
-cs with lower wine knowledge buy more expensive bottle for someone with greater wine knowledge

Question 4

What are the psychological price points?

Answer 4

-c’s more likely to buy wine priced at 9.99 than 10
-producer might lower price slightly so retailer can hit desired price point