Submitted by:
Sumeet Goyal
Roll no. 13001532049
MBA 2yr. (2nd sem.)
PRICE SENSITIVITY OF INDIAN
CONSUMERS
HOW TO DEFINE PRICE
SENSITIVITY?
The degree to which the price of a product affects
consumers purchasing behaviors. The de...
WHY INDIAN CONSUMER PRICE
CONSCIOUS?
A consumer want to have maximum satisfaction
from his limited income and want to purc...
Indian customers are less price sensitive to low
cost item or the items they buy frequently.
They are also less sensitive ...
INCOME AS A FACTOR OF PRICE
SENSITIVITY.
A consumer is defined as price sensitive when he
has a limited income.
For ex. A ...
STRATEGY TO BE USED BY
PRODUCERS.
Downsize or Price Increase, Which Strategy is
Right?
There are revenue drivers and there...
To decide which strategy is the best fit for the
category:
 Manufacturers need to take a portfolio approach
across brands...
 For pure profit-play categories like shampoos,
fragrances, chocolates and skin care,
manufacturers can retain or even in...
FIVE TIPS FOR SUCCESS
PRICING:
 Down-sizing (reduction) minimizes the volume loss for
impulse and non-essential products ...
CONCLUSION:
An Indian consumer is price sensitive, he needs the
best out of his limited income. According to
today's scena...
THANK YOU
of 11

Price sensitivity of indian consumers

Published on: Mar 4, 2016
Published in: Business      
Source: www.slideshare.net


Transcripts - Price sensitivity of indian consumers

  • 1. Submitted by: Sumeet Goyal Roll no. 13001532049 MBA 2yr. (2nd sem.) PRICE SENSITIVITY OF INDIAN CONSUMERS
  • 2. HOW TO DEFINE PRICE SENSITIVITY? The degree to which the price of a product affects consumers purchasing behaviors. The degree of price sensitivity varies from product to product and from consumer to consumer.
  • 3. WHY INDIAN CONSUMER PRICE CONSCIOUS? A consumer want to have maximum satisfaction from his limited income and want to purchase the product which could do so. A consumer is RATIONAL. The Indian consumer is extremely value conscious consumer and makes very considered purchasing decisions.
  • 4. Indian customers are less price sensitive to low cost item or the items they buy frequently. They are also less sensitive when:  There are few or no substitutes or competitors.  Buyers are less aware of substitutes.  They are slow to change their buying habits.  They think the higher prices are justified.  The expenditure is smaller part of the buyers total income.  The product is assumed to have more quality, prestige and exclusiveness.
  • 5. INCOME AS A FACTOR OF PRICE SENSITIVITY. A consumer is defined as price sensitive when he has a limited income. For ex. A consumer buys a product his income is 15 Rs. When 100 units of product costs Rs. 15 But the price of the product increases to Rs. 20 for 100 units then he would: Purchase less of the units or purchase a substitute of the product. But if the prices are less then he would go with the product with more of its quantity.
  • 6. STRATEGY TO BE USED BY PRODUCERS. Downsize or Price Increase, Which Strategy is Right? There are revenue drivers and there are volume drivers, but deciding with tactic works best is dependent on the price sensitivity of the category. Three strategies should be considered: “Passing the Buck” – consistently cut costs by either down-sizing or taking a price increase to drive revenue. “Making Money” – introduce premium packs or small packs with a higher cost per serving to drive revenue. “Share Play” – offer appealing value packs and promotions to drive volume.
  • 7. To decide which strategy is the best fit for the category:  Manufacturers need to take a portfolio approach across brands by identifying where the brands fall in the sensitivity grid.  Brands that have a high sensitivity to price and low sensitivity to deals, benefit from a low shelf price without promotions. Products like butter and cheese fall in this quadrant.  Products like juices, carbonated soft drinks and salty snacks, however, while sensitive to price, also respond well to deals. These brands will benefit most when low prices are coupled with promotions.
  • 8.  For pure profit-play categories like shampoos, fragrances, chocolates and skin care, manufacturers can retain or even increase the shelf price and offer no promotions. And the products that do not benefit from a low shelf price, but gain the most from promotions include detergents, confectionary products and soap/body wash.
  • 9. FIVE TIPS FOR SUCCESS PRICING:  Down-sizing (reduction) minimizes the volume loss for impulse and non-essential products versus increasing price.  The premium segment is the strongest revenue growth driver.  Small packs are less sensitive to pricing changes and can gain higher revenue during price increases.  Larger packs tend to be highly sensitive to pricing changes. Price increase will result in both volume and value losses.  Distribution is critical in mitigating inflation risks and direct distribution channels are significantly better in driving volume share for your brands.  During tough economic times, manufacturers and retailers need to continue to focus on penetration and consumption strategies. Deciding the best approach, however, takes careful consideration to protect revenues. Taking a portfolio approach to pricing will mitigate future inflation
  • 10. CONCLUSION: An Indian consumer is price sensitive, he needs the best out of his limited income. According to today's scenario Indian consumers have less income but the prices of the products are increasing day by day, so the consumers are shifting to another substitutes or they are purchasing less units of the product.
  • 11. THANK YOU

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