Consumer perceptions of value
Consumers are generally looking for value. They want to feel that they have
bought the right product to satisfy their needs and paid a fair price for the
quality of product they have purchased.
The consumer perception of value is influenced by:
Merchandisers are very aware that value motivates consumers to buy.
Therefore, the product price point is one of the important factors considered
when displaying a product for sale. The wrong price point, either too high or
too low, can affect sales negatively.
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The company purchased a large quantity of a well-known paint product
for $8.00/gal from a company in another town that was going out of
business
The product normally would have cost the company $12.95/gal and
would regularly sell for $19.95/gal
The company merchandisers decided to build a huge pile of the product
on the sales floor and offer the product to consumers at an
extraordinary price of $11.95/gal
At this price the merchandisers felt they would move the product quickly,
offer the consumer a super deal, and still make a 33% GM for the
company
The display caught the eye of customers, but they didn’t buy.
The store manager wondered why the product was not selling and, after
some investigation, discovered the customers had to be convinced by
the salespeople that the product was not damaged in some way
The customers were not buying the product because they were assuming
that because the price was so low, there had to be something wrong
with the product
The store manager increased the price of the product by $5.00/gal to
$16.95/gal and sales dramatically increased
The customers nowperceived that this was a good value.
Claims made in advertising media
Testimonials and ratings published in industry reporting magazines such as
Consumer Reports
Apparent track record or reputation of the product in the marketplace if it has
been available for a long time
Referrals and recommendations from family and friends who have used the
product