Key Effects Influencing Buyer Willingness to Pay PPT

This PPT slide, part of the 56-slide Strategic Pricing Framework and Tactics PowerPoint presentation, outlines nine effects that significantly influence a buyer's willingness to pay full economic value for products. The first effect, the Reference Price effect, highlights that buyers become more price-sensitive when the product's price is compared to perceived alternatives. It emphasizes the importance of positioning in retail environments, suggesting that the placement of products can alter consumer perception. For example, locals may avoid tourist-trap restaurants, indicating that context matters in pricing sensitivity.

The second effect, the Difficult Comparison effect, points out that when alternatives are hard to compare, customers lean on trusted brands or relationships. This can be particularly relevant in sectors like management consulting, where brand reputation plays a crucial role. The slide suggests that providing clear pricing information, such as unit pricing, can facilitate better comparisons and potentially increase sales of lower-priced brands.

The third effect, the Switching Cost effect, discusses how the costs associated with changing suppliers impact price sensitivity. The greater the switching costs—both monetary and non-monetary—the less sensitive customers are to price changes. New suppliers often absorb these costs to attract customers, which can be an effective strategy.

Overall, the slide provides valuable insights into consumer behavior and pricing strategies. Understanding these effects can help businesses tailor their pricing models and marketing strategies to enhance perceived value and drive sales. The content is particularly relevant for executives looking to refine their pricing strategies in competitive markets.

EXPLORE MORE SLIDES FROM THIS PRESENTATION

EXPLORE MORE PRESENTATIONS ON

Pricing Strategy Consumer Behavior Sales Positioning