Determinants of Price Rigidity:

Determinants of Price Rigidity:
The Role of Psychological Prices,
Price Changes and Sales Promotions



Summary of the article



This article is about price rigidity. Price rigidity a little flactuation of the price of a product or it’s a non changing situation of the price over a long term.This situation exist in big retailers recently the reason is that big retailers have a control over their suppliers and thier choices over the products effect the pricing.The determenet of price rigidity can be classified as ; phscological prices, price changes, sales promotions and the brand equity.Coming to the question of how these factor effect the pricing w emay say odd pricing used as a marketing strategy can influence the choices of the buyers. That’s to say when you increase the price of a product in odd numbers such as 9.90 the customers seemed insensitive to this change. However when you increase the price of a product by one degree as from 10 ten 11 the customer seem to be sensitive to this change and the sales drop dramatically. Therefore w emay say using odd pricing decreases the price rigidity. Price changes and the promotions may effect the pricing rigidity of a product if the brand does not have a strong position and equity in the market that means the bigger your market share and brand value are than the less price rigidity you will have and to sum extend you will have the freedom to decide over your products price as you wish.
Big retailers buy products follow the same route with the strong brand. However national or less known brands on the contrary seem to be affected by price rigidity a great deal.


Gürkan YILDIRIM

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