Price Sensitive Consumers Reactions to Upscale Technology

Anja Rosengaard Fog

Student thesis: Master thesis

Abstract

The aim of this study is to understand how price sensitive consumers react towards upscale technology products and its prices. Furthermore, how such insights can be used for effective pricing strategies. In order to make the research more focused the upscale technology brand Apple and their products, in particular the iPhone X, are used as a case example. To meet the aim for this study, the research method consist of 12 semi-structured interviews with a sample frame concerning university students in Denmark who are considered to be a sensitive consumer target group. The conducted interviews reflect and draw on the framework; the emotional side of price by O’Neill & Lambert (2001) and are concerning the following propositions; P1: price affect will be associated with product involvement, P2: Price affect will be associated with price consciousness, P3: Price affect will be associated with internal reference price, P4: Price affect will be associated with price-quality inferences. To identify key meanings and opinions from the interview, an analysing process of summarizing is used and a theory driven thematic analysis is made. The findings from the theory driven thematic analysis showed that products and pricing generates multiple affections. The key findings regarding the propositions, first product involvement (P1), showed that the interview participants were highly involved with Apple and their products. Though, in regards to the interviewees’ high price consciousness (P2) towards the price of the iPhone X, the interviewees’ high product involvement (P1) was not enough to make them buy the upscale technology product. This is because the interviewees’ internal reference price (P3) was crossed and when a price exceeds a consumer’s internal reference the consumer will often develop negative price affects and most likely turn away from a purchase. Furthermore the high price of the product made the interviewees question the price-quality relationship (P4), which they found unrealistic. These findings could be critical for Apple’s sales, therefore acknowledgments, and recommendations in regards to price sensitivity measurement, pricing objectives, and pricing strategies such as bundling pricing and dynamic pricing are suggested.

EducationsMSc in Business Administration and Information Systems, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2018
Number of pages94
SupervisorsCarina Antonia Hallin