Purchase Model Paper

Given the number of products available, the bargaining power of customers in this industry is very high. The two main drivers for customer’s preferences are quality and price, there is no service involved.

Designing an appropriate pricing strategy is always a challenging task for most corporations, because price is a determinative factor of operating profits. Meanwhile, price can affect customer perceptions and product development. According to the basic economic theory, pricing policy should reflect the product’s costs and the relationship between supply and demand. In addition to the fundamental framework, price settle mechanism should take into consideration the underlying industry environment. For example, pricing in manufacturing is heavily cost-based with the certainty that the costs are fully covered. And conversely, in some particular sectors, there are downsides when price setting relies solely on the variable costs because of the high fixed cost. Based on this judgment, product providers should carry different pricing mechanism under different market conditions. Accordingly, pricing evolves from a purely academic topic related to the economic theories to a profits-maximising instrument involved with marketing practices. All these issues make the price setting problem more

How will a consumer decide whether to purchase a good? When a consumer purchases a good, what does this reveal?

As the customer has some fixed value on the product based on the market value comparing with other products in the market.

This model is important for anyone making marketing decisions. It ensures the marketers consider the whole buying process rather than just the purchase decision.

Pricing can play an important role in the success or disaster of any product. Too high a price and the product will fail; too low a price and not enough profits will be made to sustain business operations (Hisrich, Peters, & Shepherd, 2014). The key is to make the customer think that they are paying exactly the right price for the product. Anything else though in this regard means the product is not positioned well in the mind of the consumer. First of all, Gril-Kleen will have to decide on what sort of strategy it needs to pursue. This strategy is decided on three factors namely costs, margins and competition.

Price is an important factor in the marketing mix not only because it drives revenue and business sustainability, but also because it acts as a signal of value to consumers. Consumers often use price as a way to gauge quality or exclusivity. Moreover, price can also help segment the market, by customer, product-form, location, time-basis, or price sensitivity. By offering products at different price ranges, a wider range of consumers can

Consumers always base their decisions on price. The price of an item is important as it can influence consumers to purchase the product or not. If a product is out of their price range most people aren’t likely to purchase the product unless

As we all know, products are bought in the market only because it possesses a certain value for

the psychological meaning of a product to customers. On the other hand, cost is related

An analysis is done on how the customer perceives the company’s products in comparison to the competitors’ products. Based on this understanding and the competitors’ prices the pricing is done.

buy according to the price. It is just the application of the law of value. In this

A person will affect purchased product by personal experience, direct marketing and mass media. Moreover people make 5 stages for purchasing decision making choices about which product and service they chosen. Through stages problem recognition, information search, alternative evaluation, purchase decision and post purchase behavior to buy their needs and wants.

Over the last decade, product marketing and ways through which communication takes place between manufacturers and consumers has changed tremendously (Belch & Belch 2004). Due to the technological revolutions and the rise of innovations such as the mobile phones and the internet, control over information has shifted apparently from the manufacturer's hands to the hands of consumers (Belch & Belch 2004). The market environment has also changed due to globalization of marketing strategies, loss of confidence in media advertising, increased reliance on targeted communication methods, and media fragmentation and so on (Belch & Belch 2004).

Quite often, consumers purchase goods and services based on their perceived need. Upon making the decision that a need is present and a solution is available consumers are more equipped to react to that need. Although previously perceived that consumers will normally accept prices as presented by suppliers that remains to not be the case. Consumers assess and process prices based on past purchases and other psychological process they went through previously such as persuasive marketing strategies, accessibility of the goods or services and possibly information gathered from prior purchasers of a product. There are countless options that are available to consumers. Consumers are then faced with the choice of choosing the product that best fulfills their need at that given point. Consumers who are knowledgeable regarding prices will be aware of the approximated price for products (Zhao, Zhao & Deng, 2015).