Consumers' Reaction To Product Prices Depends On How Powerful They Feel

Researchers of a new study found that a consumer's reaction to the price of a product depends on how powerful he is feeling at that time.

Recession and inflation have led to a continuous variation in product prices leaving customers confused. However, according to researchers from University of Texas and Fudan University, customer's reaction to product prices depends partly on how powerful he/she is feeling at the moment.

Researchers note that customers often compare the fairness of product prices in two ways. The first one is with what they paid earlier for the same product and what other customers are currently paying for the same product. Authors of the study looked at how self perception contributed to how a person compared product prices in both ways.

"The degree to which one feels powerful influences which type of price comparison threatens their sense of self-importance and, in turn, affects the perception of price unfairness," authors of the study said in a press release.

Through the study researchers found that people who felt more powerful thought product pricing was unfair when they compared the product price with what others were paying and people who didn't feel powerful thought product pricing was unfair when they compared the product price with what they had paid for the product in the past. Researchers also noted that while "high power" people were more likely to get angry and complain about unfair product pricing, "low power" people were more likely to be upset and use tactics to stop thinking about unfair product pricing.

"Our findings suggest important ways that marketing professionals can engage customers of different power statuses," the authors said. "For example, when marketing to high-power customers, one can better elicit preference by highlighting the special treatment that they are receiving in relation to other customers. Conversely, when the target customers are relatively low in power, loyalty may be better cultivated by highlighting the consistency in service or the level of commitment to these customers."