MARKETING DISCUSSION

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MARKETING DISCUSSION

The price sensitivity of a consumer is significant to marketing practice and theory because of its effect on profitability. A firm understanding of one’s product’s price sensitivity can help an organization identify the various price ranges that will maximize the business income while also determining the effect of pricing changes on sales numbers. Contrary to what many business people believe, a business’s product’s price sensitivity isn’t synonymous with its pricing strategy in terms of pricing. Previous research reveals that brand loyalty, customer purchasing preferences, the item is a luxury versus a necessity, and price of purchase compared to income influence price sensitivity. From this list, brand loyalty and customer preferences remain the most impactful areas of price sensitivity for my business.

Literature is filled with references to brand loyalty- depicting its nature, consequences, and correlates. Given the breadth and depth of input on the subject, brand loyalty assumes numerous sizes and shapes in literature. Although an agreed-upon description of the term remains elusive, numerous practitioners and researchers accept that brand loyalty impacts a business’s profit levels and sales for several reasons. Jacoby and Kyner (1973) postulates that customers tend to buy repeatedly when they are delighted with the services or products. These consumers become loyal to the business and its brand. Loyal consumers have been not only essential but also necessary for my business to establish brand equity and thrive in the market. These loyal consumers are price insensitive to price changes compared to non-loyal customers, who tend to be sensitive and hasty in making decisions about the brand. Due to familiarity with the business’s product quality, loyal customers are always ready and willing to shell out more money for the business brand as their trust is embedded in us.

On the other hand, customer purchasing preferences entail likes, dislikes, expectations, inclinations, and motivations that drive customers’ purchasing decisions. Gabor & Granger (2010) posited that customer preferences are a significant driver of price sensitivity. Although appealing to customer preferences is a standard marketing technique, today’s consumers have proven brilliant. Before deciding to buy a business’s products, they review product prices and performance via social media and online sites. While surfing this data, they can examine a product’s value and price advantages. With this, it has become difficult to ensure whether consumers’ required models are present. This affects not only my business but also others.

References

Jacoby, J., & Kyner, D. B. (1973). Brand loyalty vs. repeat purchasing behavior. Journal of Marketing research, 10(1), 1-9.

Gabor, A., & Granger, C. W. J. (2010). Price sensitivity of the consumer. Management Decision.