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A STUDY OF RELATIONSHIPS BETWEEN PRICE PERCEPTIONS AND DEMOGRAPHIC FACTORS IN THE BAKERY PRODUCTS IN BANGKOK
By
Miss Gorragot Poolgird
An Independent Study Submitted in Partial Fulfillment of the Requirements for the Degree Master of Business Administration Program in International Business
International Program
Graduate School, Silpakorn University Academic Year 2013
Copyright of Graduate School, Silpakorn University
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A STUDY OF RELATIONSHIPS BETWEEN PRICE PERCEPTIONS AND DEMOGRAPHIC FACTORS IN THE BAKERY PRODUCTS IN BANGKOK
By
Miss Gorragot Poolgird
An Independent Study Submitted in Partial Fulfillment of the Requirements for the Degree Master of Business Administration Program in International Business
International Program
Graduate School, Silpakorn University Academic Year 2013
Copyright of Graduate School, Silpakorn University
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The Graduate School, Silpakorn University has approved and accredited the Independent Study title of “A study of Relationships between price perceptions and Demographic factors in the bakery products in Bangkok” submitted by Ms. Gorragot Poolgird as a partial fulfillment of the requirements for the degree of Master of Business Administration in International Business
...
(Associate Professor Panjai Tantatsanawong, Ph.D.) Dean of Graduate School
.../.../...
The Independent Study Advisor
Chaichana Teerasukittima, D.B.A.
The Independent Study Examination Committee ... Chairman (Ardiporn Khemarangsan, Ph.D.)
.../.../...
... Member (Jantima Banjongprasert, Ph.D.)
.../.../...
... Member (Chaichana Teerasukittima, D.B.A.) .../.../...
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55502305 : MAJOR : (INTERNATIONAL BUSINESS) INTERNATIONAL PROGRAM KEY WORD : PRICE PERCEPTION / DEMOGRAPHIC FACTORS / BAKERY PRODUCT / BANGKOK
GORRAGOT POOLGIRD: A STUDY OF RELATIONSHIPS BETWEEN PRICE PERCEPTIONS AND DEMOGRAPHIC FACTORS IN THE BAKERY PRODUCTS IN BANGKOK. INDEPENDENT STUDY ADVISOR: PROF. CHAICHANA TEERASUKITTIMA, PH. D., 77 pp.
The purposes of this research were represents a study about the demographic factors that effect on price perception of bakery products in Bangkok. An independent study on the knowledge of price of bakery products that classified by demographic factors; gender and age, as well as studying about the effect of demographic factors on price perception of Bakery products in Bangkok. The demographic factors are gender, age, and education level due to they are the main importance influences in price perception.
The research instruments were study based on a survey questionnaire which delivers to the samples who step out of a bakery shop in Tops Supermarket in Bangkok in order to receive a fresh memory on price. The perception measures by feeling of the samples on price of bakery product in Bangkok.
The results of this research were as follow:
1. It shows that the most of the sample in Bangkok who believe they check on the price cannot remember the exact price of bakery products.
2. Demographic factors have an effect on price perception especially gender, age, and education.
3. The awareness in terms of price is different for individual as well as the perception on a specific product.
Program of International Business Graduate School, Silpakorn University
Student's signature... Academic Year 2013 Independent Study Advisor's signature...
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ACKNOWLEDGEMENT
I would like to thank all the people who have helped and inspired me during my Independent Study. Especially I would like to express my great appreciation to my advisor, Prof.
Chaichana Teerasukittima, Ph. D., for his guidance, patience, kindness and willingness to support.
I thankfully appreciate all of the support received from Prof. Adiporn Khemarangsan, Ph.D., for the guidance during my research and study.
Thanks for all the people who response for my questionnaire and provide value information for my research. I am thankful to my friend who helps me to gather the data and support for the computer program.
My deepest gratitude goes to my family for their always support, understanding and encouragement for all through my life.
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TABLE OF CONTENTS
Page
Abstract ... iv
Acknowledgments ... v
List of Tables ... vii
List of Figures ... viii
Chapter 1 Introduction ... 1
Research Objective ... 5
Definition of the study ... 5
2 Literature Review ... 7
Mental Price and Price Perception ... 8
Price and Value ... 12
Price-influence and age segments ... 13
3 Research Methodology ... 15
Research Instrument and Sampling Method ... 15
The Samples ... 16
4 Data Analysis ... 17
Hypothesis ... 17
5 Conclusion and Recommendation ... 39
References ... 41
Appendix A ... 44
Appendix B ... 75
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LIST OF TABLES
Tables Page
1 Relationship between gender and check on sale price ... 18
2 Relationship between gender and check on price of sandwich bread ... 19
3 Relationship between gender and check on price of sweet bread ... 20
4 Relationship between gender and check on price of savory bread ... 21
5 Relationship between gender and check on price of croissant ... 22
6 Relationship between gender and check on price of danish ... 23
7 Relationship between gender and check on price of a piece of cake ... 24
8 Relationship between age and check on sale price ... 26
9 Relationship between age and check on price of sandwich ... 27
10 Relationship between age and check on price of sweet bread ... 28
11 Relationship between age and check on price of savory bread... 29
12 Relationship between age and check on price of croissant ... 30
13 Relationship between age and check on price of danish ... 31
14 Relationship between age and check on price of a piece of cake ... 32
15 Relationship between age and feeling for price of sandwich ... 34
16 Relationship between education and feeling for price of cake ... 35
17 Relationship between gender and feeling for price of croissant ... 36
18 Relationship between gender and feeling for price of danish ... 37
19 Relationship between gender and feeling for price of cake ... 38
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LIST OF FIGURES
Figures Page
1.1 Number of modern trade per 100,000 populations in SEA countries ... 2
1.2 Trade Balances of grocery products in modern trade ... 3
1.3 Bakery Market Size in SEA countries ... 3
1.4 Consumption of wheat and wheat flour per capita in SEA countries ... 4
1.5 Expenses of coffee break per capita in SEA countries ... 4
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CHAPTER 1 INTRODUCTION
Recently, bakery product is popular in Bangkok. One of the reasons is because of the widespread of Western culture and the influence of a culture from Japan. Previously, the price of Bakery product in Bangkok is high but when it became more popular, the price is decreasing. It is interesting to know when people purchase bakery products, do they really know the exact price of what they are buying and from their point of view, it is over price, low price or moderate price which means do they feel that they are buying expensive, cheap or reasonable price for the products, how they willingness to pay. Therefore, it might be useful to gain some insight into market-specific consumer price knowledge as a basis for improving pricing in practice.
Bakery segment in Thailand can separate into three levels:
1. Upper / premium level
As of now, there is an extra level of super-premium bakery. The target group is the people with high income, having a habit of having delicious foods made from premium ingredients, original or specific recipe. The packaging and appearance must be neat, nice, and beautiful. The famous bakery shops and bakery shop in hotels are in this level.
2. Middle level bakery
Delicious with quality and the moderate selling price are the key word for this level.
The middle income people are able to purchase. Packaging design must attract the buyers.
Bakery and confectionery shops in Japan have a philosophy that even the taste of each confectionery is not distinctive, but the customer pays attention to the nice and attract packaging.
3. Budget / Low level bakery
For those who gain middle-low income, the bakery products display in a tray or plastic bag. The price is reasonable due to moderate quality of the ingredients so the selling price is not so high. The products sell in downtown and vicinity areas.
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Those 3 levels has their own loyalty customers but the Upper-Premium and Middle level are able to expand more customers because they are grouping in downtown area, Superstore, shopping mall, and they are continuing to launch new branch as well.
Bakery products in Bangkok are also available in Modern trade, the more they grow is the more bakery products grow as well. The following figures show the support evidence;
Figure 1.1 Number of modern trade per 100,000 populations in South East Asian countries in the year 2011
According to Figure 1.1, the number of modern trade per 100,000 populations in Thailand has highest number in South East Asia. Convenience store is the highest number at 12.6% follow by Supermarket at 8.3%, and Hypermarket at 0.4%.
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Figure 1.2 Trade balances of grocery products in modern trade in the year 2010
Figure 1.3 Bakery market size in South East Asian countries.
Market size of bakery products in Thailand is around USD 558.4 million in 2011.
Number one is Philippines at USD 759.1 million, and number two is Malaysia at USD 559.2 million.
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Figure 1.4 The Consumption of wheat and wheat flour per capita in South East Asian countries.
Wheat and wheat flour consumes somehow represent the size of bakery market significantly.
Figure 1.5 Expenses of coffee break per capita in South East Asian countries.
The purchase of a cake in Thailand is higher than a coffee and the highest in South East Asian countries. Other countries consume coffee more than cake.
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All of the figures above represent the growth of bakery market in Thailand significantly.
Bakery products affected economically, adjustments urgently needed. The most sellable period of bakery product is during Christmas and New Year holiday. KASIKORN RESEARCH CENTER (KResearch) projects for the Sales of baked goods in 2008 are THB 7 billion which was increasing from previous year for 1-3%. The average grows in 2008 when compare to 2007 is 5- 7% per year.
Research objectives
1. To study the knowledge of the price of bakery products classified by demographic factor of gender.
2. To study the knowledge of the price of bakery products classified by demographic factor of age.
3. To study about the relationship of demographic factors on price perception of Bakery products in Bangkok.
Definition of the study
Price is a value that purchases a finite quantity, weight, or other measure of a good or service. The consideration gives in exchange for transfer of ownership, price forms the essential basis of commercial transactions. It may fix by a contract, left to determine by an agreed upon formula at a future date, or discover or negotiate during the course of dealings between the parties involve.
In commerce, price is determine by what (1) A buyer is willing to pay (2) A seller is willing to accept
(3) The competition is allowing to be charged
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With product, promotion, and place of marketing mix, it is one of the business variables over which organizations can exercise some degree of control. Also called Sale price and selling price.
Price Perception; is the valuation of good or service according to how much consumers are willing to pay for it, rather than upon its production and delivery costs. Using a perceived value pricing technique is somewhat arbitrary, but it can greatly assist in the effective marketing of a product since it sets product pricing in the line with its perceived value by potential buyers.
Bakery products; Baking is process of cooking by dry heat, especially in some kind of oven. It is probably the oldest cooking method. Bakery products, which include bread, cake, and pastries, usually prepare from flour or meal derives from some form of grain. Bread, already a common staple in prehistoric times, provides many nutrients in the human diet.
Baking traditionally does at home by women for domestic consumption, by men in bakeries and restaurants for local consumption and when production is industrialized, by machines in large factories. The art and skill of baking remains a fundamental one and important for nutrition, as baked goods, especially breads, are a common food, economically and culturally important. A person who prepares baked goods as a profession is called a baker.
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CHAPTER 2 LITERATURE REVIEW
As one of the marketing mix variables, price plays an important role in influencing consumers’ perception of products, increasing demand, attracting customers, and promoting brand loyalty, among other things. Price of a product has a major influence on the buying decision (Alba et al., 1999; Monroe, 1973). Price management does not only determine how prices perceive and value but also influences consumers’ purchasing decisions (Binkley and Bejnarowicz, 2003; Dolan, 1995; Mesak and Clelland, 197779; Monroe, 1973, 1992; Shapiro, 1968; Simon, 1989; Turley and Cabaniss, 1995; Vanhuele and Dreze, 2002). Does consumer realize and understand favorable pricing? As a precondition to valuing a price as low, the consumer must have at least a vague idea of the normal price. Only if that idea of “normal price”
is present consumers can assess whether or not the offer is a bargain (Evanschitzky, Kenning and Vogel, 2004).
Price knowledge is a psychological construct that is relevant to the success of the retailer, since it influences a consumer’s buying decision. At the same time, it can help the retailer to exploit the consumers’ “willingness to pay” by using information about price knowledge for the pricing of products (Evanschitzky, Kenning and Vogel, 2004). The construct of price knowledge consists of two parts. One is deals with the “knowledge concerning a price”, which include accurate, figure-oriented content, and the other is it deals with “price feeling”. A consumer for instance, only has vague (ordinal, or nominal) price knowledge expressed as a price judgment such as expensive or inexpensive. This distinction makes in the work of Monroe and Lee (1999), who distinguish between price knowledge as a part of the implicit and explicit memory.
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Mental price and price perception
It knows from the concept of reference price that consumers evaluate prices comparatively (Monroe, 2003). A reference price is an internal standard against which observed prices are compared (Kalyanaram and Winer, 1995). A reference price form based on memories of actual experiences, perceptions of current stimuli (contextual influences), inferences drawn from related experiences (temporal influences), and information from others (Van Raaij, 1991). It shows that consumers’ reference prices depend on a range of prices for a particular product. The magnitude of the price range influences by the highest price and the lowest price, and these endpoints along with the reference price influence the consumers’ judgment of prices (Kalyanaram and Little, 1994; Monroe, 2003).
Studies on price knowledge have often analyzed the importance of price in consumers’
purchase decisions. Most of these studies have found that those consumers who perceive prices more accurately are the ones who place a higher degree of importance on them (Brown, 1971;
Hirn, 1986; Kujala and Johnson, 1993; McGoldrick and Marks, 1987). This premise largely confirm by studies in which the importance of price in purchase decisions operationalized indirectly, through other related variables: the attention consumers pay to prices (Chanson et al., 1986; Conover, 1986; Dickson and Sawyer, 1990), the use of price information (Mazumdar and Monroe, 1990), and the tendency to compare prices on a regular basis (Le Boutillier et al., 1994;
Vanhuele and Dreze, 2002). One of the working premises of the present study is that, if one pays attention to prices, makes an effort to compare prices, and uses this information to make purchase decisions, it is because prices are “important”.
The heightened interest in price perceptions is evident in the sheer number of articles about pricing. Marketers have seen margins eroded by consumers’ fixation on getting the best deal. Some product categories more affect than others, but every firm feels the pressure to keep prices in line with consumers’ expectations (Stanfoth and Hauck, 2010). Anyhow, a research from Rosa-Diaz (2004) shows that while a buyer may not able to remember explicitly the price that he or she last paid for an item, he or she might be very capable of judging a new price for products in the item category as “too high” or expensive, “a good deal” or reasonable or “inexpensive” or cheap and worth to buy. Consumers do not easily recall the exact price they paid for a product,
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memory distortion is smaller when consumers are asked to evaluate price (expensive or inexpensive) rather than to remember the exact price (Xia, 2005). Consumers can easily indicate whether the service received was under-priced, just-priced, or overpaid for the value received. To be capable of such a judgment, the buyer must have some knowledge of prices of similar items in the category. It can be noted that consumers not only demonstrate low price knowledge, but they also tend to overestimate prices. An important implication of these results is that product pricing can be modified. Since, the actual price generally overestimate, retailers have room for price variation. Moderate price increases would not convince consumers that the product is “expensive”
and they would still buy the product even at a higher price. German retailers, in particular, could improve their low revenue by increasing prices moderately for products with low price knowledge.
The perception of the price-value tradeoff and its relation to consumer behavior has not been adequately explored in the literature.
Evanschitzky, Kenning and Vogel did a research in price knowledge for German. The result relate to the German consumers’ price knowledge of three product groups and a shopping basket of strong brands. Independent of the product group, it can be noted that the price knowledge of German consumers is low. This reflects by the high percentage of nonresponses in the survey: on an average, less than 50 percent of the consumers have any idea of the price for a particular product. That figure varies from 34 percent of consumers having at least an unclear idea of the price for retail brands to 54 percent for strong brands. A teat of the two groups, those who failed to estimate prices and those who do not yield, no significant differences with respect to age, gender, income, and education (Evanschitzky, Kenning and Vogel, 2004). In conclusion of a research from Kenning, Evanschitzky, Vogel and Ahlet shows that price knowledge of German consumers is relatively low, compare to results obtain from other product categories and countries (Estelami and Lehmann, 2001; Estelami et al., 2001). In addition, they discover high price uncertainty; indicate by a wide price band up to 100 percent at the product level, and about 80 percent at the product-group level. The reason for the relatively low price knowledge can be explained by frequent variation in apparel prices (usually unnoticed by consumers) and a lack of consumer awareness, because of the relatively short lifecycle of apparels. Therefore, it is difficult for consumers to establish a consistent estimation of the price level. Possible reasons for
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relatively low price knowledge could be the lower shopping frequency; consumer is seldom confront with these products and therefore does not learn much about prices.
Brown (1971) conducted a study in which consumer confidence operationalize as the assessment of one’s own shopping ability. The researcher found that there is a negative relationship between consumers’ confidence about their own price awareness and their actual knowledge of prices. As a possible explanation for this result, the author states that “those who think they are better shoppers have a false sense of security, perhaps not recognizing the complexity of the situation, and so do not perceive price as validly as others”. Additionally, in contrast with Brown (1971), Zbytniewski (1980) found a positive (although weak) relationship between consumers’ confidence about their own price awareness and the accuracy of their actual knowledge. However, this study conduct with consumers who had little knowledge of prices and it include a single measure of price knowledge which could have obscured the analysis of the relationship between the two variables under consideration.
Therefore, the traditional role of the housewife has become increasing diluted.
Consequently, it would be reasonable to predict that gender would not generate significant differences in price knowledge (Brown, 1971; Chanson et al., 1986; Estelami, 1998; Otnes and McGrath, 2001). However, part of the empirical evidence available on this subject indicates that women have a better knowledge of prices than men (Estelami and Lehmann, 2001; Fady and Seret, 1985; Maynes and Assum, 1982; Zeithaml and Berry, 1987, cited in Zeithaml, 1988).
Additionally, most studies on price knowledge have used frequently-purchased consumer goods intended to cover the needs of the family (Estelami and Lehmann, 2001), which again, would be in line with the female role discussed above. Similar to gender, the empirical evidence available on the impact of age on price knowledge is contradictory. While some studies find no significant effect (Chanson et al., 1986; McGoldrick and Marks, 1987; Turley and Cabaniss, 1995; Zbytniewski, 1980), others show a clear influence. For example, Brown (1971) and Urbany et al., (1996) observes that older consumers have a better knowledge of prices. A possible explanation is that this age group tends to have more spare time, which allows them to spend more time studying the prices. In the case of Spain, older age groups tend to have, on average, low income levels (Instituto Nacional de Estadistica de Espana-INE, 2003b), which could make individuals pay more attention to prices.
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In contrary, Zeithaml (1982) research provides an additional perspective on this issue.
The result of her study shows that the older the participants, the higher the price recall error. This result could be due to their lesser ability to memorize and perform mental calculations, as well as to their lower educational level (Gabor, 1988; Zeithaml, 1982; Zeithaml and Fuerst, 1983).
On the basis of the previous discussion, it would be reasonable to predict that middle- aged people would demonstrate a more accurate knowledge of prices, since they are able to process and retain this information and they generally assume the responsibility for the household.
Research in marketing shows that the perception of reference price (price considered reasonable or fair by consumers) can be altered by changing how price is presented to consumers (Morris and Morris, 1990; Simonson and Tversky, 1992). If, for example, a higher price product adds to the top of the product line, buyers’ reference price increases. Research also shows that consumers respond differently to price discounts. For example, when consumers are presented with a higher discounts on both brand name and unknown brands, they are more likely to buy brand name than unknown brands (Moore and Olshavsky, 1989; Gupta and Cooper, 1992), because in the case of brand name they link reduced price with getting a better deal for their money, and in the case of unknown brands they link reduce price with doubtful quality.
Marketers also found that demand and price are not always inversely related and that demand can be increased not only by lowering price but also by increasing it. For example, Stella Artois, a regular beer in Belgium, is successfully prices at a premium level in the US market to create the impression of luxury and exclusiveness (Beamish and Goerzen, 2000). Positive relations between price and demand have often been cited as evidence of consumers not always behaving according to the rational behavior model.
There is a study investigated how using an ethical frame to market two products might change the potential consumers’ price perceptions. “Corporate accountability may be too abstract a concept to capture the attention of the majority of the public” (Tallontire et al., 2001) More specific ethical issues may be easier for consumers to understand. Thus, the study used two controversial topics, human slavery and animal testing, to investigate the impact of socially responsible corporate behavior on price perceptions. These two issues have come to the forefront of social responsibility activism (Stanfoth and Hauck, 2010).
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The study is important in understanding the ways in which consumers respond to messages touting the ethical behavior of the firm. While consumers are somewhat concerned with the ethical behavior of firms, it is not evident that they are always willing to pay additional moneys to the firm for their ethically produces products. This experiment uses snowball sampling to select American consumers. In conclusion, while being socially responsible is an end in itself, it may not allow the firms to increase prices to cover the increased costs of production. It is not apparent that consumers fully expect to share in the cost of a socially responsible global economy (Stanfoth and Hauck, 2010). The advantage of ethical of the firm is for good image.
Price and Value
It is complex relations between price and value tradeoff and overall satisfaction, purchase intention, word-of-mouth advertising and actual repurchase. Although the overall findings support the rational behavior model, findings for the niches at the edges challenge the assumption commonly held about price-value tradeoff and consumer behavior. Price and value closely relate to constructs. The former measures the monetary sacrifice consumers make to obtain a service, and the latter reflects a judgment of what they get from the service receives. While the price paid for a service determines relatively easily, value has a personal and idiosyncratic component to it (Zeithaml, 1988). When the consumers use the term of value, they might mean different things.
For example, they can associate value with low price (Bishop, 1984) with the quality of the product (Dodds and Monroe, 1985), and with what they get for what they give (Sawyer and Dickson, 1984). Zeithaml (1988) integrates these different views of value in the concept of perceived value; which is an overall evaluation of “what is received for what is given”. The perceived value represents as the tradeoff between the price paid and value received, reflecting the give and get component of a transaction (Akhter, 2009).
Price-influence and age segments
The price-influence and age segments relate to the rapidly changing economic environment in the developing PRC economy; the age segments relate to the change in social
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environment of those who grew up under Mao (1949-1976) compare with those who grew up under Deng (1978-1997). Although these Western products recently introduce into PRC can differ in retail outlets, product attributes, and promotional message and media, we expect that they will all show the impact of economic and social changes in PRC. (Anderson and He, 1998)
“Face” is very important in the Chinese culture, it relates to price. “Expensive is good”
tends to show how an individual succeeds economically in a fast-changing society. (Anderson and He, 1998)
Anderson and He assess how Chinese consumers change in the period since the death of Mao. About 800 questionnaires were circulated. They observe attitudinal differences between consumers brought up under Mao and those brought up under the more “liberal” Deng period.
These differences affect the strategies that consumer goods marketers use to promote their products in China. The distinction between those older and younger consumers can summarize as:
Younger consumers: Western modern image; youthful image with parties and social activity; affordable pricing, value for money.
Older consumers: desire for quality, “expensive is good” outlook; need for extensive product information, caution; the retail outlet as a focus for “cultivating social relationships”.
The construct of price knowledge consists of two parts. One is deals with the “knowledge concerning a price”, which include accurate, figure-oriented content, and the other is it deals with
“price feeling”. A consumer for instance, only has vague (ordinal, or nominal) price knowledge expressed as a price judgment such as expensive or inexpensive.
It shows that consumers’ reference prices depend on a range of prices for a particular product. The magnitude of the price range influences by the highest price and the lowest price, and these endpoints along with the reference price influence the consumers’ judgment of prices (Kalyanaram and Little, 1994; Monroe, 2003).
Brown (1971) conducted a study in which consumer confidence is operationalized as the assessment of one’s own shopping ability. The researcher found that there was a negative relationship between consumers’ confidence about their own price awareness and their actual knowledge of prices. As a possible explanation for this result, the author states that “those who think they are better shoppers have a false sense of security, perhaps not recognizing the complexity of the situation, and so do not perceive price as validly as others”. Additionally, in
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contrast with Brown (1971), Zbytniewski (1980) found a positive (although weak) relationship between consumers’ confidence about their own price awareness and the accuracy of their actual knowledge. However, this study conduct with consumers who had little knowledge of prices and it includes a single measure of price knowledge (absolute knowledge, i.e. the exact figure), which could have obscured the analysis of the relationship between the two variables under consideration.
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CHAPTER 3
RESEARCH METHODOLOGY
There are two parts in the research; the study starts with the awareness and knowledge of the price of bakery products as specific price knowledge, including accurate, figure-oriented content, and price knowledge comparing between gender and age. Price knowledge, as a part of clear memory, is an unconscious function so it is possible that buyers would be unable to remember the price when asked, thus, at a subconscious level, price knowledge is present, for instance, in the form of an ability to identify whether a price is within a normal price. Consumers have obscure price knowledge as a price judgment; high price or low price. The dissimilarity is made in the work of Monroe and Lee (1999), who discriminate between the price knowledge as a part of clear and unclear memories. The possible reason for this might be that there are many of memory and learning types in human brain.
Research Instrument and Sampling Method
The method would be quantitative or deductive method, collecting primary data using convenient structure survey questionnaires with some images of the bakery products in Tops Supermarket. Since there are a lot of support theories and researches, the fact could be found out to confirm the theory, and seeking for the facts or causes of social phenomena under controlled measurement. The questionnaires attach in appendix part at the end of this paper.
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The Samples
Due to the limitation of time for only 4 months, and budget, the target samples are Bangkok population for 30 persons who buy bakery product at Tops Supermarket in different area of Bangkok, Tops at Union mall Ladprao and Tops at Central Rama 2 department store, the data were collected from people who come out of the shop due to they should have fresh memory if they check and concern for the price.
Since the title of this research is related to demographic factors so the questionnaires are separated for men and women equally. Price knowledge / awareness need to study prior price perception. The result of the research is in the next chapter.
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CHAPTER 4 DATA ANALYSIS
The research is for studying the knowledge and perception of Bangkok population on price of bakery product in Tops Supermarket. As one of a factor to create a marketing strategy, seller or manufacturer needs to study how consumer perceived price of the product. It is also about product positioning, and necessary for a plan to launch a new product.
The analysis method is using Statistical Package for the Social Sciences (SPSS) statistical program. The research use ANOVA to investigate whether there is a difference in price perception between demographic factors. The kind of testing uses varied from cross tabulation independent – sample T – test or, one-way ANOVA analysis to find out if one who check the price can be remembered the exactly price or not and the perception on quality of bakery products with its price.
Hypothesis
The traditional role of the housewife has become increasing diluted. Consequently, it would be reasonable to predict that gender would not generate significant differences in price knowledge (Brown, 1971; Chanson et al., 1986; Estelami, 1998; Otnes and McGrath, 2001).
However, part of the empirical evidence available on this subject indicates that women have a better knowledge of prices than men (Estelami and Lehmann, 2001; Fady and Seret, 1985;
Maynes and Assum, 1982; Zeithaml and Berry, 1987, cited in Zeithaml, 1988).
H1: Women have better knowledge of bakery prices than men.
Additionally, most studies on price knowledge have used frequently-purchased consumer goods intend to cover the needs of the family (Estelami and Lehmann, 2001), which again, would be in line with the female role discussed above.
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Table 4.1: The relationship between gender and check on sale price Crosstabulation Count
check on sale price
Total check don't check
gender Male 10 5 15
Female 9 6 15
Total 19 11 30
Table 4.1 shows that men do check the price of bakery products more than women.
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Table 4.2 The relationship between gender and check on price of sandwich bread
Table 4.2 shows that both male and female who check the price can’t remember the exact price of Sandwich bread.
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Table 4.3 The relationship between gender and check on price of sweet bread
Table 4.3 shows number of male who check the price of Sweet bread is 10, only 1 person remember the exact price while number of female who check the price is 9, 2 of them remember exact price.
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Table 4.4 The relationship between gender and check on price of savory bread
Table 4.4 shows number of male who check the price of Savory bread is 10, only 1 person remember the exact price while number of female who check the price is 9, 2 of them remember exact price.
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Table 4.5 The relationship between gender and check on price of croissant
Table 4.5 shows number of male who check the price of Croissant is 10, only 2 person remember the exact price while number of female who check the price is 9, 1 of them remember exact price.
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Table 4.6 The relationship between gender and check on price of danish
Table 4.6 shows number of male who check the price of Danish is 10, none of them remember the exact price while number of female who check the price is 9, 2 of them remember exact price.
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Table 4.7 The relationship between gender and check on price of a piece of cake
Table 4.7 shows number of male who check the price of a piece of Cake is 10, only 1 person can remember the exact price while number of female who check the price is 9, 2 of them remember exact price.
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The result of the research supports Hypothesis 1: Women have better knowledge of bakery prices than men. Even though the result of checking the selling price shows that men do check the price more than women but in reality, when collecting information of the memory, women scores more than men.
H2: Older consumers have better knowledge of bakery prices than younger consumers.
Similar to gender, the empirical evidence available on the impact of age on price knowledge is contradictory. While some studies have found no significant effect (Chanson et al., 1986; McGoldrick and Marks, 1987; Turley and Cabaniss, 1995; Zbytniewski, 1980), others have shown a clear influence. For example, Brown (1971) and Urbany et al., (1996) observed that older consumers have a better knowledge of prices. A possible explanation is that this age group tends to have more spare time, which allows them to spend more time studying the prices. In the case of Spain, older age groups tend to have, on average, low income levels (Instituto Nacional de Estadistica de Espana-INE, 2003b), which could make individuals pay more attention to prices as well.
In contrary, Zeithaml (1982) research provides an additional perspective on this issue.
The result of her study shows that the older the participants, the higher the price recall error. This result could be due to their lesser ability to memorize and perform mental calculations, as well as to their lower educational level (Gabor, 1988; Zeithaml, 1982; Zeithaml and Fuerst, 1983).
26
Table 4.8: The relationship between age and check on sale price Cross tabulation Count
check on sale price
Total check don't check
age below 20 2 1 3
20-30 6 4 10
31-40 9 3 12
above 40 2 3 5
Total 19 11 30
Table 4.8 shows that the population at the age of 31-40 is the highest group that check the price of bakery product follow by 20-30, and below 20 and above 40 are equal.
27
Table 4.9 The relationship between age and check on price of sandwich
Table 4.9 shows none of age group remember the exact price of bakery product.
28
Table 4.10 The relationship between age and check on price of sweet bread
Table 4.10 shows that 1 sample of each group of age below 20, 20-30, and 31-40 remember the exact price of Sweet bread.
29
Table 4.11 The relationship between age and check on price of savory bread
Table 4.11 shows that 1 sample of the age 20-30, and 2 samples of 31-40 remember the exact price of Savory bread.
30
Table 4.12 The relationship between age and check on price of croissant
Table 4.12 shows that 1 sample of the age below 20, and 2 samples of 31-40 remember the exact price of Croissant.
31
Table 4.13 The relationship between age and check on price of danish
Table 4.13 shows that 1 sample of the age 20-30 and 1 sample of 31-40 remember the exact price of Danish.
32
Table 4.14 The relationship between age and check on price of a piece of cake
Table 4.14 shows that 3 samples of the age 20-30 remember the exact price of a piece of cake.
33
The result of the research is partial support Hypothesis 2: Older consumers have better knowledge of bakery prices than younger consumers; the population at the age of 31-40 is the highest groups that check the price of bakery product follow by 20-30, below 20 and above 40 are equal. The result supports hypothesis 2 by considering that the age group of 31-40 and above 40 are elder but when collecting information of the memory, the age of 20-30 (score: 2) and below 20 (score: 6) scores higher than 31-40 (score: 6) and above 40 (score: 0), the younger are able to remember the price more than elder.
H3: The demographic of Population in Bangkok has an affected on Price perception in Bakery products.
Price and quality is not always positive, the greater the price variation, the greater the reliance on price as a cue. Moreover, personal experience has an influence in Price and quality perception. People uses price for judging quality more in expensive products and it is not always the primary basis. Price and perceived quality increases in the presence of brand. Brand is perceived as a stronger indicator of quality than price.
The demographic factors use in the research is gender, age, and education level due to they are the main importance influences in price perception.
34
Tables 4.15 Relationship between age and feeling for price of sandwich feeling for price of sandwich
unreasonable neutral reasonable very reasonable
age age age age
Count % Count % Count % Count %
below
20 N=3 (21.4%)
20-30 N=2 (18.2%) N=7 (50.0%) N=1 (33.3%)
31-40
N=2 (100.0%
) N=7 (63.6%) N=3 (21.4%)
above
40 N=2 (18.2%) N=1 (7.1%) N=2 (66.7%)
Total
N=2 (100.0%
) N=11 (100.0%
) N=14 (100.0%
) N=3 (100.0%) The feeling of price of sandwich distinguished by age; all of the age below 20 feel reasonable price, most of the age between 20-30 feel reasonable price, followed by neutral price, and very reasonable price. Most of the age between31-40 feels neutral price, reasonable price, and unreasonable price, age above 40 equally feel neutral price and very reasonable price followed by reasonable price.
35
Tables 4.16 Relationship between education and feeling for price of cake
feeling for price of cake
very unreasonable unreasonable neutral reasonable
education education education education
Count % Count % Count % Count %
high school N=1 (16.7%) N=1 (16.7%)
diploma N=1 (12.5%) N=1 (10.0%)
bachelor N=7 (87.5%) N=8 (80.0%) N=4 (66.7%) N=3 (50.0%) master
degree N=1 (10.0%) N=1 (16.7%) N=2 (33.3%)
Total
N=8 (100.0
%) N=10 (100.0
%) N=6 (100.0
%) N=6 (100.0%) The feeling for price of cake distinguished by education; High school level feels the price is neutral and reasonable equally, Diploma level feels the price is very unreasonable and unreasonable equally, most of bachelor degree level feels the price is unreasonable followed by very unreasonable, neutral and reasonable price. Most of master degree level feels the price is reasonable followed by neutral and unreasonable price.
36
Tables 4.17 Relationship between gender and feeling for price of croissant
gender
Male Female
feeling for price of croissant feeling for price of croissant
very unreasonabl
e
unreasonable neutral reasonable very
reasonable
very
unreasonable unreasonable neutral reasonable very reasonable check on
sale price
check on sale price
check on sale price
check on sale price
check on sale price
check on sale price
check on sale price
check on sale price
check on sale price
check on sale price
C o u nt
% C ou nt
% Co
unt % Co
unt % Co
unt % Co
unt % Co
unt % Co
unt % Co
unt % Co
unt %
ch ec k
N
= 2
- 100.
00%
N
= 4
- 66.70%
N=
2 - 50.00
% N=
2 - 100.0 0%
N=
5 - 83.30
% N=
4 - 100.0 0%
do n't ch ec k
N
= 2
- 33.30%
N=
2 - 50.00
%
N=
1 - 100.0 0%
N=
1 - 100.0 0%
N=
1 - 16.70
%
N=
3 - 100.0 0%
N=
1 - 100.0 0%
To tal
N
= 2
- 100.
00%
N
= 6
- 100.00
% N=
4 - 100.0 0%
N=
2 - 100.0 0%
N=
1 - 100.0 0%
N=
1 - 100.0 0%
N=
6 - 100.0 0%
N=
4 - 100.0 0%
N=
3 - 100.0 0%
N=
1 - 100.0 0%
100.0% of male who check on price of croissant feel the price is very unreasonable. Male who check (66.70%) and do not check (33.30%) for croissant price feel the price of croissant is unreasonable. Male who check (50.00%) and do not check (50.00%) for croissant price feel the price of croissant is neutral equally. 100.0% of male who check on price of croissant feel the price is reasonable. 100.0% of male who do not check on price of croissant feel the price is very reasonable. 100.0% of male who check on price of croissant feel the price is reasonable.
100.0% of female who do not check on the price of croissant feel the price is very unreasonable. Female who check (83.30%) and do not check (16.70%) for price of croissant feel the price is unreasonable. 100.0% of female who check on price of croissant feel the price is neutral. 100.0% of female who do not check on price of croissant feel the price is reasonable.
100.0% of female who do not check on price of croissant feel the price is very reasonable.
37
Tables 4.18 Relationship between gender and feeling for price of danish
gender
Male Female
feeling for price of danish feeling for price of danish
unreasonable neutral reasonable unreasonable neutral reasonable very reasonable check on sale
price
check on sale price
check on sale price
check on sale price
check on sale price
check on sale price
check on sale price Cou
nt % Cou
nt % Cou
nt % Cou
nt % Cou
nt % Cou
nt % Cou
nt %
che ck N=5
- 83.30
% N=2
- 66.70
% N=3
- 50.00
% N=3
- 100.0 0%
N=5 - 62.50
% N=1
- 33.30
%
don
’t che ck
N=1 - 16.70
% N=1
- 33.30
% N=3
- 50.00
%
N=3
- 37.50
% N=2
- 66.70
% N=1
- 100.0 0%
Tot al N=6
- 100.0 0%
N=3 - 100.0 0%
N=6 - 100.0 0%
N=3 - 100.0 0%
N=8 - 100.0 0%
N=3 - 100.0 0%
N=1 - 100.0 0%
Male who check on price (83.30%) and who do not check (16.70%) the price of danish feel the price is very unreasonable. Male who check (66.70%) and do not check (33.30%) for price of danish feel the price is neutral. Male who check (50.00%) and do not check (50.00%) for price of danish feel the price is reasonable.
One hundred percent of female who check on price of danish feel the price is unreasonable. Female who check (62.50%) and do not check (37.50%) for price of danish feel the price is neutral. Female who check (33.30%) and do not check (66.70%) for price of danish feel the price is reasonable. One hundred percent of female who do not check on price of danish feel the price is very reasonable.
38
Tables 4.19 Relationship between gender and feeling for price of cake
gender
Male Female
feeling for price of cake feeling for price of cake
very unreasonable unreasonable neutral reasonable very unreasonable unreasonable neutral reasonable
check on sale price
check on sale price
check on sale price
check on sale price
check on sale price
check on sale price
check on sale price
check on sale price Coun
t % Coun
t % Coun
t % Coun
t % Coun
t % Coun
t % Coun
t % Coun
t %
che
ck N=3
- 100.00
% N=5
- 71.40
% N=1
- 50.00
% N=1
- 33.30
% N=3
- 60.00
% N=3
- 100.00
% N=2
- 50.00
% N=1
- 33.30
% don
't che ck
N=2
- 28.60
% N=1
- 50.00
% N=2
- 66.70
% N=2
- 40.00
%
N=2
- 50.00
% N=2
- 66.70
% Tot
al N=3
- 100.00
% N=7
- 100.00
% N=2
- 100.00
% N=3
- 100.00
% N=5
- 100.00
% N=3
- 100.00
% N=4
- 100.00
% N=3
- 100.00
%
One hundred percent of male who check on price of cake feel the price is very unreasonable. Male who check (71.40%) and do not check for cake price (28.60%) feel the price is unreasonable. Male who check (50.00%) and do not check (50.00%) for cake price feel the price is neutral. Male who check (33.30%) and do not check (66.70%) for cake price feel the price is reasonable.
Female who check (60.00%) and do not check (40.00%) for cake price feel the price is very unreasonable. One hundred percent of female who check on cake price feel the price is unreasonable. Female who check (50.00%) and do not check (50.00%) for cake price feel the price is neutral. Female who check (33.30%) and do not check (66.70%) for cake price feel the price is reasonable.
The result of the research supports Hypothesis 3: The demographic of Population in Bangkok has an affected on Price perception in Bakery products. The demographic factors in the research represent gender, age, and education level shows there are the different in the price perception as shown in the tables in H 3.
39
CHAPTER 5
CONCLUSION AND RECOMMENDATION
The result of this research shows that the sample of Bangkok population who check the price, most of them don’t remember the exact price of bakery products. Some of the bakery consumers are able to remember the price but maybe for only short period of time as the information from literature reviews. If the bakery sellers increase the price because the raw material price is increase consumer may not remember or notice the exact price of the products.
Consumers tend to remember the price of one own interest while indeed, they should have a price awareness for regular basis.
Demographic factors have an effect on price perception especially gender, age, and education. The awareness in terms of price is different for individual as well as the perception on a specific product. Moreover, there are a lot of factors to create price perception for one, for example, the income, specific knowledge, experience, family background, etc.
Price perception is a marketing strategy used by businesses to increase total sales.
Although the practice does not necessarily misrepresent the products being sold, it is often considered a covert, or slightly undercover, approach. The success of this strategy is dependent on consumer psychology because the message must convince customers that expensive items are not that far away in price from less costly products. Ultimately, it is up to customers to decide whether or not products warrant their investment.
A business can sometimes benefit from downplaying the value of high-end products instead of treating expensive items as though they are special. This type of psychology could work because of price perception, which is the way that consumers interpret the cost for items despite the price tag that might be attached to the products. Positioning pricey products in the same area as less expensive inventory could alter a consumer's price perception so that there appears to be less of a discrepancy between high-end and low-end items.
When a costly product is marketed to fulfill a similar purpose as less expensive items, it may be more acceptable to consumers. Without even knowing it, customers might equate costly
40
items with their less expensive counterparts simply because of the way the items are marketed and placed in a retail outlet. Subsequently, consumers might be more inclined to pay more for an item simply as a result of price perception. As long as customers understand a price to be acceptable, even if it is a result of strategic marketing efforts by a retailer or manufacturer, they may be convinced to make a higher-priced purchase that would otherwise be ignored.
Price perception could work against an organization if a customer feels deceived. For instance, bait and switch is another marketing tactic that businesses can use when performed ethically. It is the practice of advertising an inexpensive item but later attempting to sell inquiring customers a higher-priced item. Retailers can bolster sales by using the customer's inquiry as an opportunity to switch the cheaper item for a more expensive product. Savvy consumers might not fall for this strategy and price perception could be a less convincing tactic when customers have already decided to pay a certain amount for an item.
Businesses who are not seeking to capitalize on price perception would focus instead on providing consumers with transparency. This is a marketing approach that attempts to provide as much information and context about a purchase as possible, including the potential risks associated with an item. Subsequently, consumers are less likely to make selections they may later regret.
41
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