What is the price-quality relationship?
Price quality relationship refers to the price is exactly match the quality of the product or service. In the marketplace, the price is viewed as the payment for the quality of a product. A marketplace offers a bundle of features of valuable products or services. This bundle may include physical or performance features. These features are the reliability of the product, convenience of use, the flexibility of use, and aesthetics of appearance However, explore – Consumer interpretations of price.
- The equation of price-quality relation is – Price= Quality/ Value
What is the relationship between price and quality?
There are a wide variety of products and services. Among them, it is hard to choose a better one. that’s why marketers offer different types of pricing with different types of quality. They make it available for all types of buyers at once.
So, by comparing the price and quality, customers can take their purchasing decision.
Price is the most visible thing. It directly impacts a firm’s performance in the market. Based on the nature of the business, success is always measured by the extent of revenues from sales. Ideally, a set of prices will ensure the highest margin consistent with the volume consideration. Besides, it considers customer evaluations of products, responds to competitive threats, and predicts all competitive inroads. Enhance yourself on – price adjustment strategies.
Price views as a marketing stimulus. Price along with other elements influences consumer response in terms of sales growth. A lower price or reduction in pricing can increase sales. In many industries, a major competitive tool is promotional pricing. It involves short-term price cuts. The price discount is a stimulative effect on products or services. However, It is most obvious in shopping goods. Check – price elasticity.
Moreover, promotional pricing serves a dual purpose. The retailer offers it for a limited time. On the other hand, manufacturers discount for capturing more market share. In those situations, products are purchased frequently. As a result, those who switch to branded products never buy local products. Because there exists a “Price-quality relationship”. These types of customers never think of pricing. They only bother for quality. So, they are ready to pay for quality products. Explore – customer and competitors’ reactions to price changes.
The price cut is a strategy of marketers. It is marketing stimuli that influence the customers. However, it identifies the target markets and segments the markets. Moreover, Defining the markets identifies the price-sensitive customers for measuring profit. Profit maximization is possible through allocating resources based on the responses to the marketing stimulus. So, gathering knowledge on – Price is a part of the marketing mix.
