Effects of price decisions on product categories and brands

The purpose of this present paper is to analyse the influence prices have on consumers' purchase decisions. Specifically, three aspects related to this variable are considered: formation of reference prices, effects of price variances on the buying behaviour and the influence of price promotions on the purchasing process.

The paper elaborates two household panels, one national (Taylor Nelson Sofres Group) and the other regional (elaborated by us) which complements the information provided by the former.

The results confirm the use of reference prices by consumers, highlighting the importance of the stimuli present at the point of sale for their formation. Likewise, the paper observes the interrelation of strategic decisions, emphasising the collateral effects derived from them.

The paper cautions retailers that immediate discounts as a promotional strategy may be successful, but this does not apply to all product categories.