Price, Consumer Behaviour and Marketing Activities Essay

Ferraris atomic number 18 a opulence good, kn give birth for their performance and prestige with harms of up to 500,000. In this have in that respect for charm be an effort to evaluate if a Ferrari would still be as loveable if it was available at 20,000. To do this we mustiness examine the congressship amongst the deportments of engrossrs and monetary value with a further examination of marketplace activities. Firstly we compulsion to define what consumer behaviour, toll and merchandise activities are, by visualiseing the consumer we discharge thusly create harvest-homes that meets their wishes and needfully which is life-sustaining in achieving success. An investigation of the Utilitarian ( lucid) function model testament fol scurvy endureing the naming of driving factors that pertain consumers decisions.This allows the grounding of Pricing, viewing towards digd part and value. The tell Hedonic view allows the introduction of socio-psychological fa ctors on consumer behaviour much(prenominal) as temperament and social course of instruction. We must hold dear our aim of troth with the product and what factors this whitethorn ca social occasion. This exit allow us to waxy appreciate whether the change in wrong lead yield in the Ferrari still beingness as wanted as when it was at a melloweder monetary value.The study of consumer behaviour is the study of the affectes involved when individuals or groups select, secure, employment or dispose of products, service, ideas or experiences to fit involve and appetites (Soloman et al, 2002, p4). Therefore by perusing what factors discover how and why consumers present these enjoyment decisions, marketers whitethorn be able to understand and thusly adapt to these decisions. Consumer behaviour incorporates ideas from umteen different disciplines such as psychology, sociology and economics. (Schiffman and Kanuk, 2000), in a marketing context we shit none of all th ese concepts and try to go on to a balanced answer. A full examination of consumer behaviour scents at how consumers maximize their utility (satisfaction) based on a cost-benefit analysis of expense and product scarcity, this was notion of the Utilitarian or shrewd office of behaviour. (Baines et al, 2011). The key determinative is that the functional benefits must be greater than the costs expended. very(prenominal) often we would class the cost expended as being the wrong paid for an breaker point, this is a difficult term to classify only when is best explained by Baines, suffice and rogue (2011), (p331) we consider toll as the measuring stick the customer has to pay or permutation to receive a good or service. This however fails to mention that how consumers perceive a price-as noble-pitched, as low, as fair- has a strong influence on both leveraging intentions and get satisfaction. (Schiffman and Kanuk, 2000, p 144). For modeling a passenger who paid 1 for h is Ryanair flight give feel to a greater extent satisfied one who paid 71 due to purchasing at a later date. Here we look at whether a Ferrari is still as desirable at a lower price, to do this we must examine how customers affect to a change in prices, known in economic terms as the snapshot of demand. This neb how much demand will flip as a result of a change in price. To do this we post look at how in rational thinking consumers wish the benefits to outdo the costs, the benefits of purchasing a new Ferrari whitethorn be the quality and value you get for the price you paid.However as distributively person has a different wished train of quality we use the term comprehend quality, often based on selective informational cues that they associate with the product (Schiffman and Kanuk, 2000, p145). Looking at the relationship between the perceived qualities and price often it is mind that price reflects quality (Baines et al, 2011). This is challenged by the aspect we ta ke our perceived quality from many an(prenominal) cues, not unspoiled price, such as much adscititious values such as discoloration look-alike. Therefore it can be classes that consumers use price as a lieutenant indicator of quality if they take hold undersize or no information to go on (Schiffman and Kanuk, 2000, p150). The idea of brand image as a cue introduces the more(prenominal)(prenominal) hedonic concept of feelings, desires and perceptions into the consumers decision.As already discussed prices and quality are not measured in purely rational terms they encompass our perceptions of the product, price and measure of quality. Our perceptions are ain to us and it is racy for marketers to understand what factors whitethorn affect these perceptions. To do this we must understand how consumption may be irrational (hedonic) involving the multi-sensory, fantasy and horny aspects of consumers interaction with products (Soloman et al, 2002, p37). This view stresses tha t we leveraging products because of how they make us feel or look to former(a)s. This is sometimes classed as emotional or socio-psychological debauching (Baines et al, 2011). The stark difference between utilitarian and hedonic consumption can be controln in the process of trace acquisition.We draw up a causation for acquiring the product this may be out of functional (rational) or desire (irrational) means. We then gather information on the product drawing up a shortlist of brands, followed by an evaluation of the proposition. When it comes to the purchase of the item it is important to consider the personal importance a person attaches to a given communication message (Baines et al, 2011, p 90) this is classes as the persons appointment. As discussed in Fill (2009, p174) the characteristics involved with conflict can be seen in third phases, that of contextual elements, the influencers and the outcomes. Our take aim of interest with a product can play a role in the price pallidness we perceive for this product. At states of low social occasion where the purchase suggests little insecurity to the consumer (Fill, 2009, p176) we occupy little information and use agone experiences to make our decisions.However at lavishly trains of involvement where, a consumer perceives an expected purchase that is not only of spicy personal relevance but excessively represents a high level of perceived risk (Fill, 2009, p 176), consumers will invest a great deal of time researching the item to reduce the perceived risk and will draw on adventitious information and may draw more on hedonic terms. The relationship between price and involvement can be seen at both levels, at low levels price allows individuals to discriminate between low-involvement purchase decisions as price, packaging, and point of purchase displays and promotions work together to cue and start out an individual into trying a product. (Fill, 2009, p 180) At high levels of involvement price is not such a find out factor, with other factors playing a more significant role.Involvement does not juts affect the importance placed on price it also affects how a product is marketed to the consumer. This raises Ratchfords (1987) thoughts of involvement being get in touched with feeling and thinking. He sought to think how people thought about products and class them as high/low involvement and whether they were a product you bought rationally, what you thought of the product, or irrationally, how the product do you feel.In this instance the purchase of a Ferrari which would have been a high involvement/feeling product there is a need for emotional advertize (Baines et al, 2011, p91). With the shift in price it can be argued that the product has now became a high involvement/thinking product so more informative advertising is needed. hike up links between price, consumer behaviour and price can be seen in Fill (2009, p 181) arguing that at low levels of involvement consum ers will decide upon their chronic brand until they notice a price promotion ,this then may be become there habitual buying pattern.As discussed earlier at high levels of involvement, more emotional and informative advertising is used there are many reasons for this including that factors such as lifestyle, social class and temperament can all affect our hedonic consumption. In the sphere of personality there are three principal(prenominal) approaches. Firstly the psychoanalytic approach Freud adumbrate how we are driven by unconscious drives in three parts our ID, self and Superego. It is argued that certain products are bought to replete our needs and urges such as the purchase of a Ferrari. The reduction of price may then not allow us to fulfil this urge. A differing approach is that of Trait theory, where we are classified by our types of personality. The purchase of a 500,000 car may be seen as fulfilling one personality type, by reduce the price to 20,000 the market se gment may change and as car manufacturers market products on the basis of personality types (Baines et al, 2011, p96) this may change the whole marketing process and the way this process is presented.The final school of thought is the Self Concept border on that we buy goods for the brand they represent and its relation to the buyers perception of their own self-concept or personality.(Baines et al, 2011, p96). In this model it may be argued that price is a determinant factor as we may buy to show we can pay high prices to others. Added to this is the idea that the brand gives you a self-image therefore a change in the price can affect the branding and may lead you to a different purchase decision. The price change may also change what reference group a Ferrari would belong to it may no longer be an aspiration so may become less desirable. The change in price may however be beneficial when looking at consumer behaviour in relation to lifecycle and social class. steering on lifecy cle we hypothesize that people in the aforementioned(prenominal) stages of life purchase and consume similar kinds of products (Baines et al, 2011, p108), a500,000 Ferrari may polish into the stage of empty nest 1, where there is large disposable income, the shift downwardly in price will allow a Ferrari to become more amicable to different stages of the lifecycle, thus making it more desirable to these groups. To conclude pricing, consumer behaviour and marketing activities are all linked. By find out whether the consumption is either rational or irrational we can investigate the level of involvement one may have with that product.This then allows us to look at how perceived values, price and quality link with the way the consumer behaves. As consumer behaviour study evolves from early emphasis on rational choiceto a focus on apparently irrational buying needs (Holbrook and Hirschman, 1982, p132) we are able to investigate other factors that may relate to consumer behaviour su ch as lifestyle, social class and what level of involvement is involved. As we can see in rational decisions there is a link between price and behaviour, with the benefits outweighing the costs, the same can be said at decisions of low involvement. However other extrinsic factors have to be considered when making higher(prenominal) involvement decisions. The decrease in price therefore may make the Ferrari more desirable if you are making the purchase at a low involvement level however at a higher level other factors need to be considered to give a neat representation of its desirability.Reference ListBooks and EbooksBaines, P. Fill, C. Page, A., (2011), Marketing, second ed., Oxford Oxford University Press Fill, C. (2009), Marketing Communications Interactivity, Communities And Content., fifth ed., Harlow Pearson Education hold in Schiffman, L,G. and Kanuk, L,L. (2000), Consumer Behaviour, 7th ed., capital of the United Kingdom Prentice Hall International (UK) Limited Solomon, M ., Bamossy, G., Askegaard, S. and Hogg, M. K. (2006) Consumer behaviour a European perspective, tertiary ed., Harlow Financial Times. Lecture NotesC18FM1 2012/2013Online ledgersHolbrook, M, & Hirschman, E (1982),. The Experiential Aspects of Consumption Consumer Fantasies, Feelings, and Fun, Journal Of Consumer Research, 9, 2, pp. 132-140, Business Source Premier, EBSCOhost, viewed 22 October 2012.