IMPACT OF MULTIPLE PRICING STRATEGIES ON CONSUMER PURCHASING BEHAVIOR
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FIRST PART
INTRODUCTION
1.1 INTRODUCTION TO THE STUDY
Numerous pricing schemes are prevalent in today’s culture. When we turn on the television, read the newspaper, or listen to the radio, we are immediately exposed to a variety of price methods. These include the Internet, mailboxes, and many others. Advertisements give us with up-to-date information about the newest products and are an effective means of introducing products and promoting new ones. The purpose of advertising is to draw attention to a product. As a result of their ability to make things so appealing, we frequently purchase items that we do not need, especially when these advertisements include price techniques such as discounts.
Undoubtedly, price is one of the most essential market aspects (Bauer, Klieger & Koper, 2004). It is evident from the literature that there are different approaches to pricing structure. Price framing refers to the manner in which the offered price is presented to the consumer (Briesch, Krishna, Lehman & Yuan, 2002). Different ways of presenting the same information can have a significant impact on customer decision making and choosing behavior.
Blair and Landon (1981) discovered that consumer estimates of the advertiser’s normal price are greater for advertisements with a reference price than for advertisements without a reference price. Reference price is a concept representing an internal benchmark against which observed prices are compared (Kalyanaram & Winer, 1995). This impact can increase consumer estimates of the product savings offered by the advertiser, hence increasing interest in the advertised deal. In a study examining the effects of advertising framing on price expectations and purchase decisions DelVecchio, Krishnan, and Smith (2007) discovered that framing influences consumers’ perceptions of the advertised price and the importance they assign to the advertised price. In their first study, they discovered that when the monetary value of a promotion is high, consumers’ pricing expectations are much greater when the promotion is presented as a % off rather than as a dollar amount off. Consequently, we utilize a discount percentage in the present investigation. The second study examined whether frame influences post-promotion selection. The results demonstrated that when the monetary worth of a promotion is substantial, a cent-off promotion resulted in a reduction in post-promotion selection.
Customers are the center of any enterprise. Every company’s ability to exist will depend greatly on its potential clients. Consequently, a business that fails to identify and retain its clients will fail. In Finland, businesses are proliferating from all directions, thereby expanding the size of numerous industries. Typically, organizations in the same industry share a common client base; hence, as the number of businesses in an industry grows, so does competition for customers and, by extension, market share (Berry, 2001).
A comprehensive poll reveals that ties between businesses and clients are deteriorating. Instead of praising their business partners, customers complain about the stress, confusion, and manipulative transactions in which they are caught and abused. Ironically, marketers do so many things to develop deep relationships with clients, yet the majority of these actions have the opposite effect (Berry, 2001,p 134). The twenty-first century reflects significant shifts in the marketing techniques firms and institutions utilize in order to be highly competitive and sustainable in the chaotic marketplace in which they operate. Today’s consumers inhabit a world in which the purchasing of goods and services is massive and constant (Rindell, 2008).
Currently, the survival or profitability of a business is contingent on the amount of information obtained by that business regarding the purchasing behavior of consumers.
In order to remain in the marketplace, businesses are acutely interested in establishing powerful brands that result in long-lasting and loyal consumer connections (Hess, Story and Danes, 2011). Companies devote significant time and money to the study of behavioral and sociological elements in order to develop extensive knowledge and comprehension of customer purchasing patterns.
Thus, brands are essential company assets (Rindell, 2008).
Pricing has become an integral aspect of contemporary marketing tactics and is now regarded as a vital organizational asset (Kotler, 2000). The development of marketing is exemplified by organizations shifting their focus from a product or market perspective to a consumer or customer orientation. As a result of this paradigm change, businesses are pouring vast amounts of money into understanding their customers in regard to the 4 p’s (product, price, place, and promotion) and the additional 3 p’s (people, process, and physical evidence) (Kotler,1999).
Competition in the telecommunications industry has required telecommunications companies to improve their corporate performance not only in terms of teledensity (number of subscribers per 100 people), but also by engaging in intensive marketing activities such as branding, promotion, and advertising.
The telecommunications industry has generated new opportunities for acquiring and sharing knowledge for a variety of objectives. Additionally, families have been able to stay in touch.
1.2 DESCRIPTION OF THE PROBLEM
Despite the fact that many businesses possess superior products, they are often unable to compete in the market owing to ineffective pricing methods. Thus, powerful brands have the potential to produce long-term and loyal clients, which could lead to an increase in future sales. 20011
Due to the difficulties in managing brands and their benefits, the research will focus on a critical examination of branding and its role or influence in the customer purchasing decision-making process.
Multiple pricing strategies are a pricing technique in which the same product is sold at different prices. Multiple pricing schemes for telecommunications products (especially MTN and Globacom) present a significant obstacle in the form of inconsistent pricing, which undermines client confidence in the products. When there is inconsistency in the pricing of products, customers tend to lose faith in an organization’s legitimacy. These issues need an investigation into the influence of numerous pricing schemes on consumer purchase behavior, using MTN and Globacom Nigeria as a case study.
1.3 OBJECTIVES OF THE STUDY
This study’s purpose is to evaluate the effect of diverse pricing methods on consumer purchase behavior, using MTN and Globacom Nigeria as a case study. Included among the specific aims are the following:
Determine how consumers perceive MTN and Globacom’s use of numerous pricing strategies.
Determine how customers perceive MTN and Globacom’s varied pricing schemes for their products.
Determine if multiple pricing tactics affect consumers’ perceptions of the legitimacy of MTN and Globacom.
Examine whether multiple pricing strategies effect user interest in MTN and Globacom’s offerings.
Determine if there is a correlation between numerous pricing methods and the purchasing behavior of MTN and Globacom customers.
1.4 RESEARCH QUESTIONS
The following are the pertinent research questions linked to this study:
How do people feel about MTN and Globacom implementing multiple pricing strategies?
IMPACT OF MULTIPLE PRICING STRATEGIES ON CONSUMER PURCHASING BEHAVIOR
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