14061580
Description
Flashcards by Kirsty McPherson, updated more than 1 year ago
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Created by Kirsty McPherson
about 7 years ago
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| Question | Answer |
| What is PSM Model P4QWTP | - Assesses consumer price perceptions - Uses consumer responses from 4x price-related q's - Determines the range of prices of max & min WTP |
| What applications does the PSM Model have: | - Tool for OPP (Optimal Price Point) - Diagnostics of price perceptions of consumers |
| What are the four prices related Q's asked when collating data of consumer responses: TE, TIE, BTE, B | Is the Product: 1) Too expensive, would not consider 2) Too Inexpensive considered not good quality 3) Beginning to get too expensive, the complexity of decision-making increases 4) Bargain or Great Value |
| Consumer responses are quantified providing a plottable graph called: | Cumulative frequency of distributions - % of responses vs each $ |
| In a cumulative frequency of distributions graph what is expected from the curves of plot | It is expected that: - The too expensive and too inexpensive curves fall below their respective expensive vs inexpensive curves |
| What is the IPP indicating | Indifference Price Point - Expensive vs Inexpensive are equal |
| What is the PMC indicating | Point of Marginal Cheapness -Expensive vs too inexpensive are equal |
| What is the OPP indicating | Optimal Price Point - Too expensive vs too inexpensive are equal |
| What is the PME indicating | Point of Marginal Expensiveness - Too Expensive vs Inexpensive are equal |
| What determines the actual range of acceptable pricing | The range between the PMC & PME - Price of marginal cheapness & - Price of Marginal Expensiveness |
| Why is the range between the PMC & PME used as the "Actual Range of Acceptable Pricing" in established markets | To remain competitive in the market. |
| What does the IPP reflect: Indifference Price Point | The median price actually paid by consumers in the market or price of products of market leader |
| What are the disadvantages of PSM Model | - Does not replicate actual shopping process - Only tests respondents knowledge of product price levels - Respondents experience in the market determines the results dependent on the good or bad point of reference |
| If respondents do not have a good point of reference in the market it can lead to: | Underestimation of price and ability of the product to command a premium price. |
| Respondents are directly questioned on their WTP rather than analysing: | consumer purchase behaviour |
| The actual range of acceptable prcing may not correspond with what: | The consumer-defined pricing of responses |
| Does PSM responses reflect purchase intent from respondents | No |
| Advantages of PSM model are: | - Simple Method - Easy to execute & understand - Tool for gauging consumer price perceptions & expectations |
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