Journal of Retailing Consumer Price Sensitivity

Question: Discuss about the Journal of Retailing for Consumer Price Sensitivity. Answer: Introduction: The above article is based on the journal retailing selected from the ABCD(Australian business deans council) journal ranking list within the quality level of A. In the article, Consumer Price Sensitivity and Price Thresholds, the authors have illustrated about the price model related to the price gains and losses of a particular company. The model as proposed by the authors, acts as a threshold for the companies related to their competitors and consumer specific factors. The proposed model, as claimed by the authors, is superior to the ordinary logit and other existing price models, which can be evident from the scanner panel data applications related to the purchase of coffee. The authors have been able to determine the sensitivity of the consumers towards the prices. They have postulated the fact that the higher price volatility makes the consumers more sensitive towards gains and less sensitive towards losses. On the contrary, the intense price promotion by the companies makes th e consumers less sensitive towards the gains and more sensitive toward losses. Thus, the authors, by this postulation, have been able to determine the price sensitivity of the consumers in respective of the price thresholds. The article marks the emergence of the two segments, which differ in the size of the thresholds. The article also discusses about the implications of the managers of the organizations because of segmentation. The article also help the readers in better understating of the power of the brands and the influence on the consumers related to their pricing strategy and thresholds. The article also makes a methodological commitment by recommending the price of threshold is probabilistic in nature. Type of Research: The author collects lot of data and he also grasps lots of different information and done huge amount of research in his article. They may utilize a wide range of approaches to depict their exploration the most well-known kind of research is Qualitative and Quantitative sort of research. Qualitative research is a fundamentally exploratory research which is used to gain an opinion, reason and motivations. It gives lots of insights knowledge into issues or creates thoughts. Qualitative research is used to uncover trends in opinion and thoughts which plunge into the issue is known as Qualitative. Where on the other hand Quantitative research is utilized to measure the data by way of gathering numerical information which can be changed into usable insights, techniques for gathering the information might be in different structure they may be online reviews interviews etc. These journal best suites the Quantitative sort of exploration, the information for study the Consumer Price Sensitivi ty And Price Thresholds have drawn from information resource. The research was done on the households who buy the ground caffeinated coffee in mid-1980 from Pittsfield caf The coffee dataset, as incorporated in the article, has been acting as a base of research where the researchers have been in the quest of determining the price thresholds. In addition, writers of this article likewise utilized comparative dataset gives to contrast their model with model with others and publish their study. Authors have deducted a portion of the information from the original source of data. They did not take into consideration of those households who ware non-continuous and light users. The data represents the purchase information for 376 households for 84-week period out of which first 32 weeks ware used for initializing model variables, and the last 52 weeks were used for model calibration. The fundamental center of analysis was on 4 major brands which accounted for more than 80% of the category volume. So while looking that we can say that this is Quantitative type of research. (S.Han et al./ journal of retailing77(2001)435-456). Author also has used lots of descriptive information in this article about the data information by using tables, graphs and formulas From the analysis of the information presented above, it can be evident that the article incorporates the Quantitative research. Motivation: Researchers believe that the purpose of this article is to investigate the presence and greatness of price thresholds and the factor that influence these thresholds. In this article we can see that there are 3 major factors that can affect the price thresholds, they are company, competitive and consumer factor. According to Han, Gupta and Lehmann (2002), there are four essential approaches, which the managers of the brands are required to implement while making changes in the price thresholds. The four essential things are (i) to offer minimum price discount for the customers, (ii) to segment the customers according to their purchasing power, (iii) recognizing the brand and understanding its value and (iv) identify and manage the variable cost that affects the price thresholds. These thresholds affect the customer purchasing power due to small changes in the price which capture the consumer insensitivity The main objective of the article is to describe the factors that affect the pri ce thresholds in brands including the brand choice, competing models and the influence of the price on the consumers. Research Question: Research questions are needed to be very clear, exact and researchable. Researchers motive is to find the solution of the relevant factor. The significance of the study is to conduct extensive research on the price threshold of brands and its effects on the consumers such that to produce a unique price model that could be helpful more superior than the existing models. The researchers might be very precise and associated with the overall interest of the related field. The introduction of the article is related to the existence of price thresholds and the multiple factor that affecting these types of thresholds it is the main purpose of this research. In related to the above there are research questions of how frequent price promotion on customer choice i.e. while doing the frequent price promotion reduce the effectiveness of price discount by making thresholds for gain larger and consequently making consumer less sensitivity to price discount? On the other hand do they sharpen client to cost marking down, in this way making them deal seekers? It was suggested that while giving more frequent discount makes the customer more price sensitive in the long run. In addition, the article also helps in proposing a model by implementing a probabilistic threshold in reference to the price model. Study has suggested that thresholds of misfortunes and increase are probabilistic in nature instead of deterministic. In regards to above research question it is important to know which key factors may affect these thresholds which will help in better way to understand the customer choice process? Controversial Results of the Paper: As we know that all the research has few controversial results. In this research also it was found that changing in price have a significant impact on the thresholds. In addition to this how frequently the price is changing and how promotion is influence the thresholds. Lastly, price volatility to have a major impact on these thresholds efficiently change taking into account the evaluating methodology of general stores. For instance, it is conceivable that EDLP stores have lower thresholds than HI-LO stores. These outcomes may have possibly capable ramifications for both manufactures and retailers. Discuss the Conclusions: Thus, to conclude, the researchers have emphasized on the price model that is superior to the existing models, which could be helpful in providing a better understanding of the consumer behaviour. In this article the researchers examine all the framework of proposed model and conclude that customers choice is affected by prices. Secondly, the researchers have been focusing on evaluating the factors that affect the price thresholds value of the brands and its effects on the consumers as well. Thirdly it helps the capacity to recognize the deviated effect of illustrative variables on the thresholds of loss and gain. At last the study has given two vital ramifications, which are manager based division and thresholds based brand power. From the analysis of the research study, it can be evident that the researchers have been able to provide better understanding of the consumer purchasing behaviour by illustrating a unique price model. The researchers also implemented the probabilistic thr esholds for gains and losses in respective of the price of a particular brand. Reference: Han, S., Gupta and Lehmann, D.R., 2002. Consumer Price Sensitivity and Price Thresholds. Journal of Retailing. 77(4), pp.435-456. University of Southern California, 2015, Organizing Your Social Sciences Research Paper: The Research Problem/Question, Viewed 22 October 2015, https://libguides.usc.edu/writingguide/introduction/researchproblem.