What are the effects of price changes on consumer behavior?

What are the effects of price changes on consumer behavior?

Price changes can significantly influence consumer behavior, affecting demand, purchasing decisions, and brand loyalty.

Can you give me an example of how a price increase might affect sales?

Sure! If a popular product's price increases, some consumers may seek alternatives, leading to a drop in sales for that product.

What about price decreases? Do they always lead to higher sales?

Not always. While price decreases can attract more buyers, they may also lead to perceptions of lower quality or brand value.

How do psychological factors play into this?

Psychological factors, like perceived value and consumer expectations, can greatly influence how price changes affect buying behavior.

Are there any exceptions to these trends?

Yes, luxury goods often defy typical trends; price increases can sometimes enhance their desirability and exclusivity.