Page 77 - DMGT506_CONSUMER_BEHAVIOUR

Consumer Behaviour

Notes of acceptable market prices; plausible high prices are close to outer limits of the range but still
not beyond the limits of believability and implausible high prices are definitely beyond the
limits of acceptable range of prices. So long as the communicated reference price is within a
given range of consumer’s acceptable price, the external reference price is taken as believable
and accepted.
Tensile price claims communicate a range of price savings such as “save up to 50%”, “save 20 to
40%, or “save 30% or more.” Objective price claims on the other hand offer a single discount
level such as “save 20%.” Since tensile and objective price claims cover a broader range of
products, they produce a more powerful impact on consumer purchases and store traffic than
ads offering a discount on a single product.
5.2.2 Perceived Product and Service Quality

Consumers often tend to assess the quality of a product or service on the basis of different types
of information they relate with the product or service. Intrinsic cues (cues are stimuli that direct
motives) relate to the physical attributes of the product such as the size, colour, or smell etc,
which are sometimes used to judge the quality of a product. For example, quality of perfumes is
often judged on the basis of fragrance, physical appearance of the container, packaging and its
colour. Many detergent powders and cakes are traditionally coloured blue to influence the
perceived quality because consumers associate “bluing” with brightening and whitening their
laundry. Consumers like to be thought of as objective or rational in their assessment of products
and believe that their product choices are based on intrinsic cues. It is a different matter that
quite often the physical attributes considered to judge the quality have no intrinsic relationship
with product quality. For example, consumers who claim that one brand of soft drink is tastier
than the other often fail in blind taste tests. According to Michael J Mc Carthy, consumers often
fail to differentiate among different cola drinks and actually base their preference on extrinsic
cues such as advertising, pricing, packaging or even group pressure.
Consumers lacking actual experience with the product tend to judge the quality on the basis of
extrinsic cues such as brand image, price, or even the country of origin etc. Lacking previous
purchase experiences may lead to an awareness that higher-quality products tend to cost more
and high-price may become an indicator of higher-quality and suspect the quality of low-priced
products. In India a little over a decade ago “foreign” make meant superior quality.
Kent B Monroe and Susan B Petroshius have summarised research findings to show how
consumers react to price variable:

1. Consumers seemingly use price as an indicator of product quality as well as an indicator
of purchase cost.
2. Consumers appear to develop reference prices as standards for evaluating prices they see
in the marketplace.
3. Consumers’ reference prices are not constant and get modified by shopping experiences.
Their exposure to price higher or lower than reference price is likely to result in upward
or downward movement of the reference price.
4. Consumers tend to develop a range of acceptable prices around the reference or standard
price. Prices above or below the reference price are likely to be judged as unsuitable and
may lead to decreased willingness to purchase the product.

5. Factors, such as brand image or store image, can soften the strength of the perceived
price-quality relationship.
6. If the prices for different alternatives are perceived as similar, then price is unlikely to
influence the choice between these alternatives.

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