Consumer Price Sensitivity Research Articles

Unlocking Market Potential: Strategic Consumer Segmentation and Dynamic Pricing for Balancing Loyalty and Deal Seeking

Background: This paper examines the economic implications of market segmentation on consumer purchasing behavior with a particular emphasis on intertemporal pricing strategies in dynamic markets. Methods: In order to analyze optimal discount rates and the timing for price reductions for consumer segments, including loyal and deal-prone customers, a detailed mathematical model was developed. The model incorporates theories of consumer behavior and pricing elasticity to simulate market responses to price changes throughout a product’s lifecycle. Results: This research indicates that market segmentation enhances sales by targeting the distinct preferences of loyal consumers, who are less price-sensitive and who stabilize revenue streams, and deal-prone consumers, who respond to price reductions. Customizing pricing strategies for loyal consumers and deal-prone consumers increases sales volumes and optimizes profitability. Conclusions: This research improves our comprehension of market segmentation and dynamic pricing, providing a practical framework for businesses to create effective pricing strategies that can be promptly implemented. It emphasizes the significance of understanding consumer behavior and price sensitivity in the interest of revenue promotion. This study also emphasizes the social implications of equitable pricing practices, promoting the implementation of transparent and value-based strategies to promote market inclusivity and consumer trust.

Cultural Influences on Dynamic Pricing and Consumer Price Sensitivity in FMCG Industry

Cultural Influences on Dynamic Pricing and Consumer Price Sensitivity in FMCG Industry

Scarcity effect in collaborative fashion consumption via the C2C online platform: moderating effect of consumer price sensitivity and gender

ABSTRACT This study investigates the effect of scarcity on purchase intention in a collaborative fashion consumption situation using a C2C platform. Furthermore, it examines the moderating effect of consumer price sensitivity and gender. A mixed experimental design method of 2 (scarcity level: high vs. low) × 2 (consumer price sensitivity: high vs. low) × 2 (gender: male vs. female) was applied. This study found that although the scarcity level did not directly affect purchase intention, the effect was moderated by price sensitivity. Consumers with high price sensitivity show greater purchase intention under low scarcity, whereas consumers with low price sensitivity show greater purchase intention under high scarcity. Moreover, the interaction effect of scarcity level and price sensitivity on purchase intention significantly differed for women, but not for men. This study provides insights for C2C platform marketers to devise marketing strategies considering the scarcity of second-hand fashion products and consumer traits.

Promotion Hurts Brand Personality and Consumer Responses

This study investigates the impact of promotional offers on consumer perceptions of brand personality and their subsequent behavioral intentions. Research employs a between-subjects design with two conditions: exposure to an advertisement with a promotional offer versus no offer. The results reveal that promotional offers significantly affect perceptions of several brand personality traits, notably reducing the perception of traits such as 'spirited', 'outdoorsy', and 'upper class'. Moreover, the study examines how individual differences in consumer price sensitivity and brand affinity moderate these effects, indicating that the impact of promotional offers varies across different consumer segments. Mediation analyses further demonstrate that the perceived changes in brand personality traits due to promotional offers significantly mediate the relationship between advertising conditions and consumer responses, such as willingness to pay a premium and likelihood of visiting the brand's retail outlets. These findings suggest that promotional offers can alter consumer perceptions of brand personality. This study provides essential insights for marketers on how promotional strategies can be optimized to influence consumer attitudes and behaviors effectively, offering a nuanced understanding of the interplay between promotional offers, brand personality perception, and consumer behavior.

Analysis of the Effect of Perceived Product Quality on Retail Purchase Intention: The Mediating Role of Consumer Trust and Price Sensitivity Moderation

Analysis of the Effect of Perceived Product Quality on Retail Purchase Intention: The Mediating Role of Consumer Trust and Price Sensitivity Moderation

Do Consumer Lifestyle, Halal Labels, and Prices affect Purchasing Decisions?

Lifestyles are increasingly modern, and the needs of consumers past and present are clearly different according to the lifestyle adopted by consumers. Currently, consumers follow developments in trends in all aspects of needs ranging from primary needs to secondary needs in accordance with the lifestyle they adopt, namely the halal lifestyle. This research aims to determine the influence of lifestyle, halal labels, and price on the purchasing decisions of Emina cosmetic products. The sampling technique used was Purposive Sampling. The number of respondents in this study was 100 respondents. Data collection was carried out using the Judgment Sampling method with a questionnaire instrument. The data analysis method used is multiple regression analysis, t-test (partial) coefficient of determination. The research results show that: 1) lifestyle has a positive and significant effect on purchasing decisions. 2) the halal label does not influence purchasing decisions. 3) price does not affect purchasing decisions. A managerial implication that may be relevant is lifestyle management. The company can conduct in-depth market research to understand the lifestyle of its target consumers and determine prices and a pricing strategy that suits the Emina cosmetics market segment, including considering consumer price sensitivity.

Price sensitivity of students to their favorite applications and programs

Purpose: The aim of the article is to determine the price sensitivity of students to their favorite 6 applications and programs. Design/methodology/approach: The main research problem is: What is the price sensitivity of students to their favorite applications and programs? The study was conducted using the quantitative method, the survey technique on students in Krakow (Poland) in May and June 2023. The research sample was 424 people. Findings: Every second student would not give up Messenger if it was paid at an affordable price, every third from Instagram and Spotify, every fourth from YouTube, and every fifth from TikTok. They would be less willing to pay, for example, for Facebook. Every third student would be willing to pay up to PLN 20 per month for their favorite application or program (above this amount, they would rather not use it than pay). Every fifth respondent indicated PLN 30 per month as the upper limit. The vast majority of students (71%) declared that if the respondents' favorite application or program was paid at an affordable price, they would continue to use it. One in four respondents said they would look for a replacement (25%). Research limitations/implications: Studying price sensitivity in the new technologies sector is a complex problem and the research presented in this work covers only selected aspects in this field. Practical implications: The research results show young people's declarations of price changes in the new technologies sector. Could raising the prices of their favorite apps cause them to use them less? The new technologies sector can use the research results to set prices for selected applications or programs. Social implications: The research conclusions can be used to determine whether price manipulation for new technologies can result in less use of them by young people, and thus have a positive social effect. Originality/value: The study provides insights into the willingness of students to pay for these services and identifies specific preferences and behaviors regarding the use of paid and free versions of applications. The research results can be used by owners of online platforms, marketers, educators and students. Keywords: price elasticity of demand, consumer price sensitivity, willingness to pay, new technologies, social media. Category of the paper: research paper.

Price sensitivity of consumers to organic food and the most frequently purchased categories of organic food

The aim of the study is to validate a model of consumer behaviour towards organic foods, in particular processed ones, the target population consists of two non-random samples. Two different questionnaires were used to study the two populations, but with several common questions. The aim is, through two parallel studies, to establish in which aspects there are discrepancies between the viewpoints of the respondents, with the aim of offering a different marketing approach and attracting them to the market. The authors of the study examine the consumers of organic products in Bulgaria and their specific market behaviour when buying organic foods, the relationships between their price sensitivity and the external distinctions of the products such as brand, geographical origin. Investigate whether there is a relationship between gender and number of family members, frequency of shopping and the most frequently purchased food categories.

How Do Consumers Living in European Capital Cities Perceive Foods with Sustainability Certificates?

Certification aims at ensuring food quality and safety, as well as confirming other beneficial credence attributes, such as local origin and sustainability. In order to explore the visibility and credibility of such certification labels functioning in the European Union, a study was conducted among residents of two EU Member States, Poland and Belgium. Face-to-face questionnaire-based interviews and focus group interviews were conducted among 701 adults living in Warsaw and Brussels-the capital cities of these countries. Almost 44% of Belgian respondents and 33% of Polish respondents considered certified foods as being of better quality compared to unlabeled products. Focus group interviews demonstrated that Belgian consumers had more extensive knowledge and a higher level of trust in certified foods compared to Warsaw inhabitants. Our findings suggest that certificates are moderately important factors of food choice due to the wide variety of certificates, leading to consumer confusion, a lack of label uniformity, greenwashing, limited visibility and availability at points of sale, consumer price sensitivity and the prioritization of other factors. These constraints can be alleviated by introducing food labeling standards and regulations. Increasing consumer awareness and the availability and affordability of certified foods can also boost the demand for sustainable products in the region.

No worries, eBay: displaying sales level information does not increase consumer price sensitivity

PurposeThis paper aims to study how price and sales level information influence consumer product perceptions and choices in online settings. It, in particular, tests whether displaying sales level information increases consumer price sensitivity, which is a potential strategic risk to retailers.Design/methodology/approachStudy 1 uses eBay data to investigate whether the interaction effects between price and sales level can be observed in an existing market. Study 2 involves online experiments across three product categories. Participants choose from product pairs that are shown with either the same or different prices and with no, the same or different sales levels.FindingsStudy 1 shows strong effects of a product’s displayed sales and price level on its daily sales but finds no interaction effect. Study 2 shows strong effects of price and sales levels on product choice but similarly finds no evidence that sales level information influences consumer price sensitivity, although it reveals an effect on quality perceptions. The results show how perceptions of quality, sacrifice and popularity mediate the effects of price and sales level information on product choice.Research limitations/implicationsStudy 1 has limited control over prices and sales levels. Study 2 involves only hypothetical choices.Practical implicationsThese findings indicate that businesses can use sales level information to manage consumer product quality perceptions and choices without having to be concerned that this will make consumers more price-sensitive.Originality/valueTo the best of the authors’ knowledge, this paper is the first to investigate how sales level information affects consumer responses to price differences in online contexts.

Factors Influencing Green Purchase Behavior: Price Sensitivity, Perceived Risk, and Attitude towards Green Products

The present study analyzes the effectiveness of consumer price sensitivity in expanding the use of green products. It investigates how the purchase behavior of Iranian consumers is affected by different aspects of perceived risk, such as financial, performance, psychological, and social risks. This study uses the four main concepts of ‘Perceived Risk’ (PR), ‘Attitude towards Green Products’ (AGP), ‘Price Sensitivity’ (PS), and ‘Green Purchase Behavior’(GPB) to develop a model to increase green purchase intention. This research uses an experimental study, using a survey method (questionnaire distribution)to confirm the hypotheses and discover its management concepts, and uses Structural Equation Modeling (SEM). The results show that the variable of “Perceived Risk” has a positive effect on “Attitude towards Green Products” and “Price Sensitivity”. “Attitude towards Green Products” has a positive effect on “green purchasing behavior” while “Price Sensitivity” has a negative effect on “green purchasing behavior”. This study focuses on existing literature by providing experimental evidence showing the importance of green consumption in the Iranian industry. The present model provides valuable input to policymakers and marketers to work from the perspective of policies and green marketing strategies and the research framework of purchasing green products to preserve the environment and the prevalence of green consumption among consumers.

The Effects of Consumer Innovation, Price Sensitivity, Conformity, and Consumer Values on Consumer Attitudes and Intentions to Participate in the Crowdfunding of Fashion Products

This study examined consumer attitudes and intentions to participate in reward-based crowdfunding projects for fashion products. We focused on consumer innovation, price sensitivity, conformity, and consumer values as factors that might influence such attitudes and intentions. A survey was conducted with 228 individuals aged 18 years and older who are aware of or have had experience using crowdfunding. Respondents were asked to answer questions based on the example of actual fashion crowdfunding projects. To analyze the data, reliability tests, the generation of descriptive statistics, factor analysis, and multiple regression were performed using SPSS 25.0. The results revealed that consumer innovativeness, non-conforming tendency, and emotional, quality, social, and ethnical consumer values had a significant influence on attitudes, which in turn affected intentions to participate in crowdfunding. Consumer innovativeness, price sensitivity, emotional value, and social value also had a direct influence on intentions to participate. In addition to its academic contribution, this study has important marketing implications for project initiators striving to identify and understand consumers who are willing to participate in reward-based crowdfunding for fashion products.

Modelling of pricing, crashing, and coordination strategies of prefabricated construction supply Chain with power structure.

In the prefabricated construction industry, consumers are sensitive to the construction delivery time, and different power structures are very common. This research uses methods of Stackelberg game, Nash game and supply chain coordination, introduces a manufacturer crashing strategy into a prefabricated construction supply chain and investigates the assembler pricing, manufacturer crashing, and supply chain coordination strategies under three different power structures. It finds that adopting a crashing strategy improves the supply chain's profit, while the dynamic wholesale price contract achieves supply chain coordination. Meanwhile, when consumer time and price sensitivity are low, it is easier to achieve high profits in the supply chain under unequal power distribution. Conversely, the supply chain profit is higher in the case of a Nash game. This study innovatively introduces the thought of power structure and crashing strategy into the prefabricated construction supply chain, and provides the optimal price and delivery time under three different power structures for prefabricated construction enterprises and realizes supply chain coordination. The conclusion can provide decision suggestions for the prefabricated construction enterprises under different competitive environments.

How to drive the participation willingness of supply chain members in metaverse technology adoption?

Metaverse integrates a variety of digital technologies, which can significantly reduce production costs, improve product quality and consumer experience, and has become an important direction of digital transformation of manufacturing industry. However, manufacturing enterprises need to bear too high costs and risks to develop metaverse, which hinders the development of metaverse in manufacturing industry. Therefore, on the perspective of supply chain, this study establishes the evolutionary game system in which the manufacturer, the retailer and the government participate in the development of metaverse, so as to analyze the conditions of strategy selection and system equilibrium of all parties, and uses MATLAB R2021b to conduct numerical simulation to analyze the influence of various factors on system equilibrium. Results indicate a positive correlation between the willingness of manufacturer and retailer to participate, and when both sides tend to participate in the development of metaverse, the government will also adopt subsidy strategy; The promotion degree of metaverse to product attributes will positively affect the willingness of all parties to participate; The participation of retailers positively affects the willingness of manufacturer to develop metaverse; The price sensitivity of consumers to product prices is negatively correlated with the willingness of manufacturer and retailer to participate. The incentive effect of government subsidies positively affects the willingness of the three parties to participate. Finally, this paper provides suggestions for all participants on how to strengthen the cooperative relationship so as to give full play to the functions of metaverse.

Research on Low-Carbon Strategies of Supply Chains, Considering Livestreaming Marketing Modes and Power Structures

A livestreaming supply chain composed of a single manufacturer and a single streamer in the low-carbon market is examined. Motivated by the actual production and operation, both the manufacturer and the streamer have a chance to dominate the supply chain. Low-carbon strategies and livestreaming marketing modes of the supply chain are studied. The impacts of the consumer’s price sensitivity coefficient, low-carbon preference, and streamer’s promotion sensitivity coefficient on the equilibrium results are further studied. The results show that: the streamer achieves the optimal level of promotion effort in the resale mode under both power structures. The manufacturer achieves the optimal low-carbon level in the commission mode when the promotion sensitivity coefficient is smaller under both of two power structures. The streamer’s profit is optimal in the resale mode, while the manufacturer’s profit is optimal in the commission mode when under the streamer-led structure. Two parties’ profits are optimal in the commission mode when the promotion sensitivity coefficient is smaller under the manufacturer-led structure. The low-carbon level, streamer promotion effort and selling price in two livestreaming marketing modes will increase when the streamer promotion sensitivity coefficient and consumer low-carbon preference increase and will decrease when consumer price sensitivity increases under two power structures. Lastly, the selling price in resale mode is always higher than that in commission mode under two power structures.

Price and quality competition while envisioning a quality-related product recall

Many product recalls are caused by quality-related product failures. When such recalls occur, the effects may not only be limited to the firm selling the product but also extend to competing firms in the category. This paper analyzes quality and pricing strategies for competing firms facing the risk of a severe quality-related recall making the product hazardous and leading to its removal from the market. We develop a two-stage Nash game where the probability of recall depends on the firms’ chosen quality investments, and either firm can experience a recall. We consider a utility-based model where consumers’ sensitivity to price and quality can change following the recall. Our results indicate that the competitor should lower its price after a recall if consumers’ price sensitivity changes enough and may increase or keep its price the same otherwise. Surprisingly, considering the risk of a recall does not always lead firms to enhance their product quality. If the change in consumer quality sensitivity is low enough, firms adopt an inferior product quality level than when they overlook the product recall risk, even if consumer quality sensitivity increases and/or consumer price sensitivity decreases after the recall. These results can help companies plan their pricing and quality decisions in competitive industries with potential product quality failures leading to recalls.

Information Sharing Game and Value Analysis for the Following Enterprise Applications of Blockchain Technology

To address the question of whether small and medium-sized enterprises (SMEs) should follow benchmark companies in establishing a blockchain-based information sharing platform, a two-tier supply chain decision-making problem dominated by retailers and containing two manufacturers of unequal status is analyzed, including the impact on the utility and social welfare of different game players in the supply chain and the supply chain as a whole, taking into account the fact that consumers are sensitive to both price and quality. For this purpose, traditional cooperation models, short-term and long-term models based on blockchain technology for information sharing were constructed and solved, respectively. The findings suggest that in the short term, the establishment of a blockchain technology-based information sharing platform will widen the status gap between manufacturers, making the strong stronger and the weak weaker, with retailers’ profits and social welfare suffering and no change in consumer surplus. In the long term, the quality improvement effect of information sharing will narrow the gap between manufacturers and increase members’ profits, with retailers and the entire supply chain experiencing a significant increase in profits after a short period of time, as well as an increase in consumer surplus and social welfare. In addition, when consumer price sensitivity and quality sensitivity are high, the establishment of a blockchain technology-based information sharing platform is beneficial for the stronger manufacturers, detrimental to the weaker manufacturers, and beneficial for the supply chain in the long term; otherwise, the absence of a blockchain technology-based information sharing platform is beneficial for the weaker manufacturers and the supply chain.

A new perspective on extra consumer costs for green parcel packaging — An exploration of signal theory and green values

Focusing on the price sensitivity of consumers, this study explores the factors influencing their willingness to pay a premium for green express packaging. Drawing on signal theory, this study analyses the influence of signals from packaging and society on consumers, and verifies the hypotheses based on the quantitative method of the partial least squares structural equation model. It was found that the second-hand or recyclable nature of express packaging, green information attached to packaging, policy guidance, and participation from other consumers significantly affect consumers' willingness to pay a premium. This study further evaluated the effectiveness of consumers' green values as a mediator and found that green values moderated two of the four aforementioned influencing factors, which contributes new insights to the existing research. This study addresses the lack of existing studies from the perspective of individual will and puts forward a multi-link solution path of “government, enterprises, and consumers” based on consumers' own green values. Furthermore, the study points out that in the future, sustained attention should be paid to the signal environment of green express packaging.

Advance selling of uncertain demand in low-carbon supply chain

PurposeThe development of low-carbon production is impeded by the investment costs of green technology research and development (R&D) and carbon emission reduction while facing the uncertain risk of emission reduction investment. With the government's carbon emission constraints, green manufacturers implement the advance selling strategy to increase both profit and reduction level. However, few studies consider the consumer's green preference and emission constraints in advance selling market and spot market independently. The authors' paper investigates the optimal strategies of advance selling pricing and reduction effort for green manufacturers to maximize profits.Design/methodology/approachThe authors' paper designs a stochastic model and investigates the manufacturer's optimal strategies of advance selling price and emission reduction efforts by categorizing different purchasing periods of low-carbon consumers. With the challenges of uncertain demand and government's emission constraints, the authors' develop the non-linear optimization model to investigate the manufacturer's profit-oriented decisions.FindingsThe results show the government's carbon constraints cannot influence the manufacturer's profit, but the consumer's low-carbon preference in the advance selling period can. Interestingly, the manufacturer will make fewer reduction efforts even when the consumers have stronger environmental awareness. In addition, the increasing consumer price sensitivity will exacerbate the profit loss from mandatory emissions reduction. Overall, for achieving a win–win situation between emission reduction and profit growth, green manufacturers should not only consider the sales strategies, market demand, and government constraints in a low-carbon market, but also pay attention to the uncertainty of green technology innovation.Originality/valueWith the consideration of the government's carbon emission constraints, uncertain demand, and low-carbon consumer's preferences, the authors' study innovatively incorporates the joint impacts of advance selling strategy and emission reduction effort strategy and then differentiates between two cases that pertain to the diverse carbon emission regulations.

Estimating consumer preferences for different beverages using the BLP approach

The overconsumption of sugar is a significant problem in many jurisdictions, and one possible method to remedy this problem is the taxation of sugar-sweetened beverages (SSBs). To be able to implement an optimal tax, it is important to know the preferences and price sensitivity of consumers. This article therefore estimates the price elasticity of demand for different beverages in Quebec, using the Berry, Levinsohn and Pakes (BLP) random parameter logistic demand model, combined with Nielsen data from 2010 to 2016 and the 2016 Canadian Census. The results suggest that the average consumer prefers high-calorie beverages containing fruits and vegetables, and the estimated price elasticities are between −4.40 (energy drinks) and −1.59 (regular soft drinks). As a result, consumers of energy drinks appear to reduce their consumption the most in the face of rising prices, whereas consumers of soft drinks will decrease their consumption the least. However, at a general level, the implementation of a tax on SSBs in Quebec should generate a significant reduction in consumption.