The Effect of Sudden Price Changes on Consumer Purchasing Behaviour - Essay Example

The focus groups participated in a price simulation exercise followed by interviews. The price simulation exercise exposed the participants to price changes to their preferred vehicle and observed how they responded to those changes. The follow-up interviews were calculated to determine why the participants responded as they did to the price changes in the price simulation exercise. Research findings indicate that most customers will at the very least consider an alternative brand when confronted with a price change.

However, the more affluent and loyal customers will not change brands when price changes are insignificant and are reasonable. These results are analyzed by reference to a conceptual framework drawn from the work of Villargeo-Ramos and Sanchez (2005) and Yoo, Donthu, and Lee (2000) who established a link between marketing communications and brand equity including brand awareness, brand association, brand loyalty and perceived brand quality. The results of this study confirm that price changes as a marketing communication strategy are received and interpreted in the context of the different dimensions of brand equity.

This is a qualitative case study that investigates the responses of consumers in Saudi Arabia when experiencing sudden price adjustments to the leading models in automobile categories of small sedans, medium sedans, and small SUVs in Saudi Arabia. In particular, this qualitative case study seeks to determine from the perspective of Saudi Arabian consumers the extent that price influences their purchasing behavior; the impact of price changes on the brand equity of Toyota in the context of brand awareness, brand association, brand loyalty, and perceived quality; and whether or not effective price management would improve or maintain Toyota’s competitive edge in Saudi Arabia’s market.

This chapter will explain the research methodology used for achieving the goals of this research study and the justifications for the methodology chosen.