REFERENCE PRICE, PRICE PERCEPTION AND WILLINGNESS TO PAY

Abstract

The product price plays a strategical role for both
organizations, in terms of profitability and consumer lives in terms of utilitymaximizing. However, it is difficult to predict consumer behavior toward
established prices by firms. The research works predict that consumer price
perception and willingness to pay are different. Also, a consequence of price has
been analyzed under three theories (1) Adaptation theory (2) assimilation theory
and (3) transaction utility theory. In addition to that, this work shows five types
of price perception (positive and negative price perceptions) and consumer
model of willingness to pay.