10 Pence Promotion
There is no product loyalty that a 10 pence promotion cannot break. Required: How far would you agree with the above statement? In your answer show how loyalty to any product, whatever it be, can or cannot be broken by a cleverly designed price promotion. Illustrate your answer with examples. My own notes Keywords, theories to define- What is customer value? Cost and worth Cost-based pricing Competitor-based pricing Price elasticity of demand Factors affecting customers sensitivity to price Buyers perceptions and preferences (Unique Value effect, Price-quality effect) Buyers awareness and attitude towards alternatives (substitute awareness effect, difficult comparison effect, sunk investment effect) Buyers ability to pay (Total expenditure effect, end benefit effect, shared-cost effect, inventory effect) Social objectives Technology facilitates Differential pricing (airlines, taxi-hailing apps) Ethical concerns over differential pricing Firms: Global adjustments in pricing Pricing by perceived value