Teunter (2002) on the other hand posit that researchers have thought of the reference price as an expected price. She contends that there is some evidence that reference prices do exist and play a role in product choice. She, however, point out that the question of how various promotions affect reference prices is still
According to Pigou(1920),Price discrimination is generally defined as charging a sigle price for a product or service despite the fact that the costs of supply are different for different customers while Tejvan (2014) supports that the price discrimination is referred to charge different prices to different consumers for the same good and charging at the different price it depends on several criteria such as the quantity bought, time of use, age profile and when unit is bought. In respect of importance, we can separate in two sides. Firstly in the groups of consumers, some of them can get the benefits from the price discrimination while some consumers cannot. Secondly, the business will gain more profits when use this into their firm.
For the model which will then be developed, shall be required of this representative consumer that we've already endowed with certain characteristics of the decision of the consumption behaviour. Then following the model of Rubinstein (1998) presents the model with cognitive bias. Since the structure of information strongly influences the characteristic of its decision, variant introduced here is a new information structure which includes not only price but also quality and brand effect. The model focuses not on empower decision taker to make an optimal decision since there are restrictions on the information that the perceived or information that can be transferred from the moment in which one has access to price information in one of the shops at the moment that has to make the decision. Assumptions: - Set of action A - Set of states , all the sets of possible prices that can be offered in store i.
Stakeholders or shareholders will gain the target of the growth in the value of company stock and may increases the income of the dividend. Employees will be stable at a fair rate of pay and working in a safe and comfortable environment. Customers get the “fair exchange”, a product or service of acceptable value and quality for the money spent.The company prompt payment for deliveries goods to the suppliers on time. The retailers also can deliveries the quality products on accurate time and at a reasonable cost. Secondary stakeholders only an indirect stake in the corporation but who are also affected by corporate activities.
Ac-cording to a study regarding consumer’s responsiveness to sales promotions (Rohr et al. 2013), consumers are highly influenced by such price discounts which affect their purchase decision. The interesting or challenging fact is that customers tend to buy any spirit brand, if it is under price promotion, which means that loyalty is not that high, if the price is attractive enough. This problem was faced over the past years, and brands spend a lot of time and effort for making brands competitive enough to assert themselves against its competitors. There-fore, it is vital for the brand to be attractively represented at the point of sale, in-cluding several merchandising materials, which create high visibility.
The increasing importance of companies’ image and reputation Corporate transparency led to the growth of the importance of a further element: corporate reputation since the more a company is transparent, the less it can be perceived as “unethical” and “dishonest”. As a matter of fact, corporate reports can be used as tools that promote some virtues of a company while firms that do not use them result opaque and can ruin their image because of undesirable hidden practices. By voluntarily publishing relevant info about some internal dynamics, companies take on responsibility and accountability of externalities that they could otherwise ignore. Moreover, a transparent company does not have to fear moral judgment and critics because transparency appears to be a deterrent not only to misbehaviors but also to public shames. In a context where costumers appear to be experienced and able to select tons of info about the goods they want to purchase, scandals about info and side effects hidden by companies have strongly impacted on companies image, ruining it and leading to a drop of companies performances.
Consumers’ purchase decision is affected by many attributes of the good purchased. While these variables have different influence on every consumer, price is certainly one of the most important variables that drive the purchase intention. Undoubtedly, the price’s role is increasingly greater for fast moving consumer goods (FMCG) and price discounts usually stimulate larger sale of the product. Therefore, the format how prices are framed and presented / communicated to the consumers is a very powerful lever for pricing managers. Aside from its qualitative attributes, price “discounts” are widely used as an effective tool for increasing the product’s perceived “inherent” value in the eyes of the consumer.
2.1.2 Pricing Strategy Theory Griffin (2015) emphasises that price is the only element in the marketing mix that produces revenues while all others represent costs; and choosing the right price for a product, helps send the correct price-quality signal. She further explains that price-signaling occurs when the cost of something reflects the product’s perceived quality and that whether or not a product is the best quality for the best price, the pricing strategy aims to convince the buyer that is the case. The theory of pricing strategy revolves around three main points: cost and profit objectives, consumer demand and competition. Consideration of customers and the demand for a product should be used to determine the maximum selling price. With the attainment of a price range, profit objectives and information about competition are used to choose the best price
Teunter (2002) and Jha-Dang (2004), however, argue that although early researchers had suggested that the mere presence of a promotion would lead to perceptions of lower quality, results of later studies have shown that a promotion’s information value is context specific. Jha-Dang further pointed out that in today’s purchase environment where most brands promote, it is unlikely that