AREA OF PROPOSED RESEARCH:

We are going to conduct a research on the impacts of pricing on consumer behavior

TITLE:
The title of our research is THE EFFECT OF PRICING ON CONSUMER BEHAVIOR

INTRODUCTION:
Price is a word of Old French origin, and the meaning of Price is "prize". We can say that organizations set price of their products according to the consumer behavior and their income level because consumer behavior focuses on how the consumer makes decisions to spend their available resources on consumption-related items. All consumers are unique and their choice varies, so organizations see the consumer and then set the prices. They give attractive choices to the consumer to gain their market shares like Buy 1 get 1 free Give free services and Discount on their products There are different pricing strategies that a company adopts, whether it is to sell a high volume at a low price, to sell a low volume at a high price or to fall somewhere in the middle. The organization also uses the pricing tactics like Charm pricing, Bumps, Considerations Anchoring Which attract the consumers mind and consumer thinks to pick a choice. The basic effect of the pricing according to the organization is to attract consumer that they buy their product, in the competition where market is same the pricing show the great

value if you have a better pricing strategy then your products sale would be more than the others. Discount on pricing give reward to the organization those customers comes again & again and employees build the customer loyalty. Some important types of pricing which give some idea about consumer behavior Premium pricing strategy establish a price higher than the competitors. It's a strategy that can be effectively used when there is something unique about the product or when the product is first to market and the business has a distinct competitive advantage. When we see the consumer according to premium pricing the behavior of the consumer is good because the new product is given to him and the price issue is not disturb able for him. Some consumer negatively affected by this because they only focus on price not on the new product which problem solving for him. A penetration pricing strategy is designed to capture market share by entering the market with a low price relative to the competition to attract buyers. The idea is that the business will be able to raise awareness and get people to try the product. Even though penetration pricing may initially create a loss for the company, the hope is that it will help to generate word-of-mouth and create awareness to the consumer, through this the trend of the consumer is change and they buy the product. Economy pricing is a familiar pricing strategy for organizations that include WalMart, whose brand is based on this strategy. Aldi, a food store, is another example of economy pricing strategy. Companies take a very basic, low-cost approach to marketing--nothing fancy, just the bare minimum to keep prices low and attract a specific segment of the market that is very price sensitive. It is the new type that can change the consumer behavior a lot through this they can change the trend of the market. Businesses that have a significant competitive advantage can enter the market with a price skimming strategy designed to gain maximum revenue advantage before other competitors begin offering similar products or product alternatives. This will affect the consumer behavior and consumer is double mind that is this product is better in

quality or only the price is more.so the strategy maker kept in the mind before making the price that the consumer behavior is affected by this or they attract toward the product. The price really effects on consumer behavior, if the price is high than the behavior of the consumer would be negative. So always see the changing trends of the consumer then make the price according to his feasibility. Every big firm gain success with the help of pricing strategy along with the knowledge of the consumer behavior and it is very important for the organization that the organization set price according to the consumer behavior which gives them a lot of benefit in the market.

IMPORTANCE OF STUDY:
Pricing factor has a great influence on the buying behavior of consumers. This research proposal is about an experiment on the effect of price brand information on perceptions of quality and value, and on willingness to buy. The research also investigated about the different perceptions when prices were going increase or decrease. The price you set for a product or service has a very significant effect on how the consumer behaves. If consumers believe that the price you're charging is lower than competitors it could cause a major spike in sales. But if the price you set is significantly higher than expected, the response can be disappointing. In any case a change in price could produce unexpected results when it comes to consumer buying behavior. In this proposal we came to know about the different behavior of customer and different prices strategies. Some customers are Quality conscious Some are price conscious And some are brand conscious

Pricing gives you an idea about the consumer behavior how they will react in different situations. In this proposal we know certain situations about prices and behave of our customers on certain situation are given below

Price Hike
Before you decide to raise the price of your existing product or service you should understand how that could affect consumer behavior. For one, when you raise the price you risk turning the customer off. If the customer has the choice to get the same product from a competitor at a lower price you could lose the customer permanently. On the other hand, raising the price could have no effect at all, especially if it is a product that is in high demand and not available at competitors. In fact, charging a higher price compared with other similar products and services sometimes attract consumers to buy because some buyers associate a high price with a superior-quality product.

Low Price Effects

Lowering or initially setting a lower price than expected can have a different set of effects on a consumer. In one case, a price-conscious consumer is grateful for a price break and will possibly stock up on the item at the low price. In other cases, the consumer could become suspicious of the low price and assume it means the product is of a lower quality.

Considerations
Due to the potentially unexpected effects of price on consumers it is important to set the right price from the start. Making a change to the price of a product or service is very risky, so do so with caution and after much consideration. Do price research in advance of releasing the offering to make sure you set a price that consumers are comfortable with, while providing you with a profit that meets or exceeds your goals. You can start by checking on the prices set by competitors and reviewing business case studies. Determine your costs and the average industry mark-up percentage (the amount above cost that you charge to make a profit).

Tracking Buying Behavior

It is helpful to set up some type of system for tracking buyer behavior at the price points you set. If you have a small operation you can simply record daily sales at the price point in a spreadsheet program, but if you have a larger operation you may need dedicated software. For instance, for a product wholesale or retail business you can use a barcode tracking system to monitor and compare product sales at different price points. So if you change the price, run reports regularly to check progress.

REVIEW OF LITERATURE
A. The main aim of the producer is to target the consumer and increase his sales which will increase his profit and fulfill the major aim of the organization to earn profit. To capture his consumer a producer or marketer do many different things such as great promotion campaigns, discounts, amazing packaging and etc. but after all these efforts, he has done, he hast to face a decline in sales. This decline can be happened due to various aspects but the major thing is Price which effects greatly. Jerry F. Conover (1984), "PRICE EFFECTS ON CONSUMER BEHAVIOR: A STATUS REPORT", in Advances in Consumer Research Volume 11, eds. Thomas C. Kinnear, Provo, UT: Association for Consumer Research, Pages: 633-635. We have categorized the buyer in different classes such as lead, middle and low class. So when we categorize the consumer then every buyer reaction is different towards different prices. Lead class reaction is different than middle and lower class but towards some products lower and middle class reactions is not different, but mostly differ from each other. This report covers the four different researches. B. PRICING PRACTICES: THEIR EFFECTS ON CONSUMER BEHAVIOR AND WELFARE paper present on pricing practices by Gorkan Ahmetoglu, Simon Fried, John Dawes and Adrian Furnham in University College London. This paper tells us that which types of pricing practices are most likely to give rise to consumer detriment and in what circumstances are these practices most likely

to give rise to detriment and when consumers have a bad experience, do they learn from it? C. Consumer Behavior is basic thing which producer has to understand and in order to do this, producer has to understand the psychology of the consumer. Producer has to understand that how consumers think, feel, reason, and select between different alternatives and how the consumer is influenced by his or her environment and what are the behavior of consumers while shopping or making other marketing decisions. By www.consumerpsychologist.com D. How Inflation Affects Consumption Behavior in Pakistan 2011 a survey from 26th April, 2011 to 4th May, 2011 conducted by International Field & Tab This newsletter explain us the current situation in Pakistan. It also helps us to understand the reaction of Pakistani nation towards inflation. Through this we will come to know that how consumer react if price increased and what step he takes.

OBJECTIVE OF PRICING FACTOR ON CONSUMER BEHAVIOR

The study of consumer behavior is very important to the marketers because it enables them to understand and predict the buying behavior of the consumers in the market place. Followings are the objectives of the pricing factor on consumer behavior. To study what proportion of population is likely to buy the product on the basis of pricing. Personal interviews are conducted to know their response against the price. To study the change of attitude of consumer with the change in price. To study the purchasing decision and power of consumer behavior. To study the effect of the limited income of consumer while buying a commodity.

RESEARCH METHODOLOGY
This section presents an overview of the methods to use in the study. The study will involve the evaluating the elasticity between consumer and price. Consequently, the research will be designed to achieve the objectives set out by the researcher in descriptive way. The data collection of this research methodology has been limited from two data resources are Primary data and Secondary data.

Primary Data
The basic tool of our research is primary data on which our whole research and analysis based. Due to different aspects of the objectives, we will provide you detailed information. Focused research will be used to explore and understand the attitudes of potential consumer towards the new price. We propose to fill out a questioner in different areas of Lahore. Personal interviews, survey and observation of different groups will also be the part of our research.

Secondary Data
Our search of secondary sources will be carried out to refine the objectives and provide lines of enquiry for the next stages. Specifically, the desk research phase will gather information about the consumer purchasing power. This trend data should give us a useful indication about price conscious and quality conscious consumer.

Statistical Tools
The responses to the structured close-ended questions will be rated in

percentages. The percentage of respondents for each alternative will be given and analyzed. The data collected through primary and secondary sources will be analyzed through different statistical tools such as correlation, central tendency etc. We will classified data in tabulated form and present it in a graphical form wherever necessary.

HYPOTHESIS
The hypothesis of the present research work is as follows: 1. Price is dividing society into two parts. 2. Increase in price destroying the Pakistani economy. 3. Great influence of Branded products and Domestic Industry.