Price is considered as purchasing information. Because there are different interpretations and utilization of consumers in making purchase decisions. Thus, the price is very crucial factors for making purchase decisions.
Customers are so much concern about the price of product or services. Because now they are much knowledgeable. besides, they have a greater excess of information regarding product price.
Setting price, marketers use psychological pricing. It has several aspects. Like -$999. It means that the price is less than $1000. But actually, it has only $1 different. However, consumers prefer these types of pricing. That’s why it is called psychological pricing.
for example, BMW Car. It is a luxurious good. Besides, it represents social status of customers. However, it is a branded car and it has more value than other cars. So, customers are ready to pay a high price. Because customer wants value from purchasing. Not only a brand can claim a higher price. Customers buy branded goods because the brand ensures quality, unique design, and special features. That’s why customers run after for brand.so, it means that price provides information about the products.
Price provides information to the customers. this information depends on the inferred relationship between price and product or service.
Does the price really provide information regarding product or service?
This is really a big question for customers. If the marketers use psychological pricing, it doesn’t provide the actual information about the products, so, customers tend to ignore it. On the other hand, if the quality is higher of a product, marketers can charge more prices. However, in this case, at first, customers need to have past experience over it. This ensures a positive price-quality relationship.
Secondly, rationalization ensures higher prices result from firms spending. Customers believe that marketers charge a high price because of more supply quality. Finally, customers have trust in the brand. They believe that they are charging more because of higher quality.
However, customer purchasing decisions mostly depend on pricing. The relationship between pricing and purchasing decisions are increasing. Sometimes we also see varieties of it. because, customers are not reacting the same on the shopping goods, luxurious goods, and specialty goods.
Customers are buying their shopping goods anywhere in the marketplace whereas specialty goods and luxurious goods have special selling store. Only there these goods are available for selling. Besides, they don’t compromise with pricing.