PRICE, CONSUMER BUYING BEHAVIOR AND MARKETING ACTIVITIES - Essay Example

? PRICE, CONSUMER BUYING BEHAVIOR AND MARKETING ACTIVITIES In order to comprehend consumer behaviors, it is important for marketers to recognize the economic constraint of consumers because it influences their decision making process concerning what they want to buy. Pricing behaviors used to advertise goods and services to consumers such as twenty thousand pounds for a Ferrari, are common in contemporary society, showing that they are advantageous for businesses (Baines et al. 2011). Further, price consultants have emerged to provide advice to business people on how to price their goods because of existence of a strong relationship among price, consumer buying behavior, and marketing strategies. It is significant for businesses to determine which pricing behaviors will harness more consumers. Buying behavior is an act where people make decisions whether to buy a certain product or not. Consumer buying behavior is the buying behavior of the final consumer product. Consumers tend to show distinct behaviors when buying products and services of their choice. It is significant to note that the type of goods they want to purchase affects their purchasing behaviors. Consumer buying behavior incorporates a long process in that the purchaser has to identify and study the product advantages and disadvantages before deciding whether to purchase it or not. Since the intention of marketing is to ensure satisfaction of the customer in return for profits, business managers need to understand the relationship among price, consumer behavior, and marketing activities. Marketers need to identify customers’ needs, preferences, tastes, desires, and expectations of consumers in purchasing their products (Doyle 2006, pp. 73–4). Marketers with this type of information can identify factors influencing consumers’ behaviors and their goods and thus, recognize the influence of these factors on the consumer buying behavior (Grewal & Mamorstein 1994, pp. 458–9). The consumer buying behavior is influenced by different factors such as price and quality of the product. Consumers do not waste their time thinking about buying the value of goods that they want to purchase. This is because they have already decided what they will purchase or not. Consumers of products may have different types of purchasing behavior that are unique to themselves. Some buyers have an intricate purchasing behavior that is linked with different products that they intend to purchase (Grewal & Mamorstein 1994, p. 462). An intricate purchasing behavior is seen when the product to be bought is expensive; therefore, the consumer will tend to be more cautious when purchasing such products. For instance, intricate buying behavior is evident when purchasing things such as cars or computers. When setting prices for such products, marketers should consider the consumer’s income since high prices will drive them away (Lichtnstein 1993, p. 239). Price is one of the most significant marketplace signals. The issue of price is very important in buying situations since it represents to customers the amount of capital they must pay for a certain product. In addition, price represents how much money a consumer is going to give to a product seller in order to acquire a product; therefore, if prices are high, they negatively affect the chances of the consumer buying a particular item (Bolton et al. 2003, p. 476). Consumer perception of the price level of a particular product has a negative influence on the buying behavior of the consumer and an indirect positive influence on buying intentions through product quality perceptions. This trend is attributed to the fact that consumers are heterogeneous in respect of their intentions and response to product prices (Lichtnstein et al. 1993, p. 241). In most cases, consumers utilize a product price to choose if they will purchase it or not. They utilize a product price to determine the efficiency and quality of that product since they tend to believe that high prices imply good quality. According to research by Bolton et al. (2003, p. 486), when consumers have access to data concerning the quality of a certain product, they often conclude that products with higher prices have high-level quality. More so, price tag is used to determine the quality of the product because the objective truth is that there is a strong relationship between price and quality. The relationship among consumer buying behavior, price, and marketing activities is very complex due to the context in which the relationship takes place. For example, most consumers are unable to differentiate the tastes of various beer brands, but when the quality of the beer is lowered, the sales decreases. Olson (2001, p. 87) argues that markets tend to develop the context for the relationship between consumer behavior and pricing to take place. It is vital to note that the quality of the product and price in the market are both intricate concepts since the analysis of quality varies from consumer to consumer and the price of the products varies from business to business. In the real market, consumer behavior influences the price of the product. Further, customers show different behaviors that have a different effect on market prices because consumers are very sensitive with prices of products on the market in that they tend to purchase low priced goods regardless of the quality of the goods. On the other hand, some consumers are sensitive to the quality of goods and not the price; therefore, they opt to purchase goods despite the high price tag (Olson 2001, p. 94). The marketing department of any business has the role of comprehending and satisfying the needs, wants, expectations, and desires of the consumer. The behavior of the consumer captures all the factors of utility, disposal of goods and services, and purchase (Kotler 2009, pp. 91­–92). If a company does not understand the consumer behavior, the company will not succeed since it will lose all its customers to other companies. For instance, the decision by Wal-Mart Company to open stores in Latin America in the same design as in the US was unwarranted because it failed to influence consumers in Latin America since Latin American consumer behavior differs from that in the US. At the end, the company suffered a lot and did not manage to make an impact in the Latin American market. Further, marketers should be aware that individual, social, economic, and cultural factors have a great role in defining the buying behaviors of consumers. For example, consumer living in the US is exposed to freedom, individualism, choice and achievement. The cultural realm, geographical location, race, and religion affect the buying behavior. On the social level, social class includes consumers with a similar level of preferences, income, and education (Jobber, 2010). Summarily, marketers in organizations need to evaluate and analyze the consumer buying behavior so that they can establish buyer’s response to the marketing strategy of the organization. Additionally, assessing the buying behavior of consumers enables a firm to develop a marketing mix which it uses to satisfy customer’s needs and expectation; thus, there is the need to evaluate where, when, how, and what consumers purchase. Marketers will be in a position to predict how consumers will react to the marketing strategy. Further, it is evident that price reflects the quality of a product even in situations where consumers’ economic constraints are neglected by price setters. More importantly, product price affects the buying behavior of consumers in both a negative and positive manner. References Baines, P, Fill, C & Page, K 2011, ‘Consumer Buying Behavior’, Oxford, OUP. Bolton, E, Warlop, L & Alba, J 2003, ‘Consumer Perceptions of Price’, Journal of Consumer Research, vol. 29 (March), pp. 474–91. Doyle, P 2006, Marketing management and strategy, Prentice Hall, Harlow. Grewal, D & Mamorstein, H 1994, ‘Market price variation, perceived price variation, and consumers’ price search decisions for durable goods’, Journal of Consumer Research, vol. 21, pp. 453–60. Jobber, D 2010, Principles and practice of marketing, McGraw-Hill, London. Kotler, P 2009, Marketing management, Prentice Hall, Harlow. Lichtnstein, D, Ridway, N. M & Netemeyer, R 1993, ‘Price perceptions, and consumer shopping behavior: a field study’, Journal of American marketing research, vol. 10, pp. 234-245. Olson, J 2001, Consumer behavior and marketing strategy, McGraw-Hill, New York. Read More