Major Project Report

On

IMPACT OF PRICE SENSITIVITYON CONSUMER BUYING BEHAVIOR

Submitted In Partial Fulfillment of the Requirement

Of

Bachelor of Business Administration

Submitted By:

Project Guide ROHAN KUMBHA

Dr. Dimpy Sachar ENR NO.: 03961201715

Assistant Professor Batch: 2015-2018

Submitted To:

Banarsidas Chandiwala Institute of Professional Studies, Dwarka, New Delhi

(Affiliated to Guru Gobind Singh Indraprastha University)

 DECLARATION

I hereby declare that this Project Report titled IMPACT OF PRICE SENSITIVITY ON
CONSUMER BUYING BEHAVIOR submitted by me to Banarsidas Chandiwala
Institute of Professional Studies, Dwarka is a bonafide work undertaken during the
period from Jan 2018 to April 2018 by me and has not been submitted to any other
University or Institution for the award of any degree diploma / certificate or
published any time before.

(Signature of the Student) Date: / / 2018

Name: ROHAN KUMBHA
Enroll. No.: 03961201715
 CERTIFICATE

This is to certify that the project work done on “IMPACT OF PRICE SENSITIVITY ON
CONSUMER BUYING BEHAVIOR “Submitted to Guru Govind Singh Indraprastha
University, Delhi by ROHAN KUMBHA in partial fulfillment of the requirement
for the award of degree of Bachelor Of Business Administration, is a bonafide
work carried out by him/her under my supervision and guidance. This work has not
been submitted anywhere else for any other degree/diploma. The original work
was carried during Jan 2018 to April 2018.

Name of the guide: Dr. DimpySachar Date: / / 2018

Designation : Assistant Professor

Counter signed by

Director /HOD

Date:
 Table of Contents

S. No. Title Page. No

1. Executive summary

2. Chapter – 1 Introduction

3. Chapter - 2 Literature review

5. Chapter – 3 Objective of the study

4. Chapter - 4Research Methodology

4.1 Research instrument
4.2 Sample size
4.3 Sources of data
4.4 Methods of data collection
4.5 Statistical instrument used

5. Chapter - 4 Data Collection and Data Interpretation

6. Chapter - 5 Findings, Conclusions, Suggestions &

Recommendations

7. Bibliography

8. Annexure
 List of Tables

S.NO. Table Table Title Page

No. No.
1. 5.1 AGE

2. 5.2 GENDER

3. 5.3 MARITAL STATUS

4. 5.4 QUALIFICATION

5. 5.5 PROFESSION

6. 5.6 MONTHLY INCOME

7. 5.7 Price is the greatest factor you consider while

buying a product
8. 5.8 Have you bought a product because of its
price?
9. 5.9 How well do price of a product catch your
attention
10. 5.10 Would you consider not buying a product
that is highly expensive?
11. 5.11 Would you consider to bargain for an
expensive product
12. 5.12 Would you consider the price of the product
whose quality is poor
13. 5.13 Do you think sensitive pricing have more
effect on consumers buying capacity
14. 5.14 Would you switch from your regular product
to a new product due to price
15. 5.15 Do you think that having sensitive pricing on
products have more effective sales than those
which don’t

16. 5.16 Do you think in some cases price sensitivity

affects customers negatively

17. 5.17 Have you ever rejected a product because of

sensitive pricing
18. 5.18 Do you think price sensitivity is an effective
tool to promote a product
19. 5.19 Do you think that price sensitivity ensures the
customer confidence in their product and
services
20. 5.20 Do you think that organization’s brand image
and reputation is completely based on its
pricing technique
21. 5.21 Would you consider the product becoming
too expensive – so that it is not out of the
question, but you would have to give some
thought to buying it
22. 5.22 Would you often shop at more than one store
in order to find the best price
23. 5.23 Do you feel that the money saved from
shopping around is usually not worth the
extra time it takes
24. 5.24 Do you consider buying product from your
favourite brand rather than the brand on sale
25 5.25 Do you often compare the pricing before
buying the product

26. 5.26 At what level do you think the ability of

buyers to carry an inventory also affects their
price sensitivity
 List of Figures
S.NO. Figure Figure Title Page
No. No.
1. 5.1 AGE

2. 5.2 GENDER

3. 5.3 MARITAL STATUS

4. 5.4 QUALIFICATION

5. 5.5 PROFESSION

6. 5.6 MONTHLY INCOME

7. 5.7 Price is the greatest factor you consider while

buying a product
8. 5.8 Have you bought a product because of its
price?
9. 5.9 How well do price of a product catch your
attention
10. 5.10 Would you consider not buying a product
that is highly expensive?
11. 5.11 Would you consider to bargain for an
expensive product
12. 5.12 Would you consider the price of the product
whose quality is poor
13. 5.13 Do you think sensitive pricing have more
effect on consumers buying capacity
14. 5.14 Would you switch from your regular product
to a new product due to price
15. 5.15 Do you think that having sensitive pricing on
products have more effective sales than those
which don’t

16. 5.16 Do you think in some cases price sensitivity

affects customers negatively

17. 5.17 Have you ever rejected a product because of

sensitive pricing
18. 5.18 Do you think price sensitivity is an effective
tool to promote a product
19. 5.19 Do you think that price sensitivity ensures the
customer confidence in their product and
services
20. 5.20 Do you think that organization’s brand image
and reputation is completely based on its
pricing technique
21. 5.21 Would you consider the product becoming
too expensive – so that it is not out of the
question, but you would have to give some
thought to buying it
22. 5.22 Would you often shop at more than one store
in order to find the best price
23. 5.23 Do you feel that the money saved from
shopping around is usually not worth the
extra time it takes
24. 5.24 Do you consider buying product from your
favourite brand rather than the brand on sale

25 5.25 Do you often compare the pricing before

buying the product
26. 5.26 At what level do you think the ability of
buyers to carry an inventory also affects their
price sensitivity
 Executive Summary
The purpose of the research is to find out and to understand the how price sensitivity affects
various people and various income groups in our society. The study aims to examine the impact
of price sensitivity on consumer buying behavior. This study also aims to recommend improving
the ways in which the people need to change their perception about price sensitivity. The study
finds out what amount of people who are willing share their view point on the impact of sensitive
pricing and areas regarding the same.

The research instrument used in this research was questionnaire. The questions were framed
according to the requirement of finding results of the research. The questionnaire included close-
ended questions. These were distributed to the people living in Delhi/NCR. The data was
collected and was analyzed using Microsoft Excel to find out the results and reach on the
conclusion of the research.

The result showed the citizens who are positively supporting the impacts of price sensitivity in
various sectors and citizens who were negatively affected by it or whose does not believe in it.
Analysis of the data revealed that people with an average income want are in support of the price
sensitivity as they cannot afford expensive products. Price sensitivity is beneficial because
sensitivity gives most of the people what they are willing to buy for themselves. Under price
sensitivity people with low income can also enjoy the comfort of an expensive product in low at
lower cost.
 CHAPTER - 1

INTRODUCTION
Price sensitivity is one of the key factors affecting to companies pricing choices as well as its
ultimate profitability. Nowadays, customers are well informed about product or service
alternatives, product benefits, features, qualities and prices through advertising, family members,
peer groups, opinion leaders, social networks, public information sources, and newspapers.

Customers are not too blind to buy a product without searching information about a product or
service. Actually, consumers are sensitive to the prices because they want to get maximum
benefits of using their money and time. Consumers are very rational to judge what they are
getting from buying a product or service in exchange of their payments for it.

Price sensitivity is an individual difference variable describing how individual consumers show
their reactions to changes in price levels. Price Sensitivity is the awareness of the consumers to
what they perceive about the cost within which they will buy a particular product or service.
Each customer will have a certain price acceptability range and different customers have
different limits in their perceptions of what price is within their ranges. Customer perceptions of
price and their responses to price indicate whether a market is very price sensitive or not.

Generally, marketers and researchers are familiar with the concept of price elasticity. If the
changes in price have a proportionately greater impact on demand for a product then it is known
as elastic demand. On the other hand, inelastic demand narrates the situation where changes in
price have a little effect on the demand. The concept of price elasticity illustrates the aggregate
response of a market segment to price levels.
Pricing strategies and buyers’ responses to prices have received a great deal of scholarly
attention but most of the researches have focused on the aggregate response of the market, price
elasticity, and not on individual consumer response.

One of the hardest decisions an organization has to make is how to price its products. Price a
product too low and you may not cover your costs or generate profits. Price the product too high
and potential customers never turn into paying customers. Pricing strategies help a manager to
answer such questions as:

 How should I price my product?

 How much will sales fall if I increase my price?

 To whom would your product lose market share to if price changes appeared?

 Are there price thresholds?

 Should I price products differently to achieve maximum sales of the entire line?
Marketing research has long recognized the importance of price optimization. Survey research
can help explore those pricing questions
.
Efficient financial markets can promote efficient real decisions. When prices are more
informative, outside investors suffer less information asymmetry. As a result, they are more
willing to provide capital to firms in primary financial markets, facilitating investment (Stiglitz
and Weiss, 1981). Under this channel, the extent to which financial markets support capital
raising, and thus real investment, depends on the total amount of information in prices.

External Influences

Price Sensitivity in the Market

Price sensitivity refers to the changes in customer demand as a price changes. For example,
commodity goods such as petrol have high price sensitivity. The difference of a few cents in
price can impact a customer's behavior.

Some markets are more sensitive to price increases than others. Price sensitivity can change over
time based on a number of factors including changes in the economic environment, competition
or demand. Factors other than price, such as quality, service, and uniqueness, can also influence
price sensitivity.

Level of Demand
Demand for your products or services will have a great influence on price. Generally, the higher
demand for your product, the higher you can price your product and services. Demand can also
be influenced by price. For example, lowering the price of a product can increase demand
temporarily.

Level of Competition
Competition can impact your price and its sensitivity. Generally, the less competition you have,
the higher demand there is for your product. Changes in your competition may also impact your
price, such as a new competitor entering the market could affect the level of demand for your
products or services.

Your competitor's activities can also have an impact on your pricing decisions, whether they
have a new feature, an advertising campaign running or a price reduction.
 Government regulations
Depending on your industry or how global your market is, local and international regulations can
sometimes influence your pricing decisions.

Researching Price Influences

Research can help you find the optimum price for your products. Generally, the optimum price is
one that your customers are willing to pay, without it affecting your profits. This isn't a one-off
activity, you must monitor your key pricing influences regularly as part of your overall market
research to ensure your prices stay competitive and you still meet your customers' expectations.

Market Testing
To help you determine how much your customers are willing to pay for your product/service you
should perform some form of market testing. As a start, research your customer's purchasing
behavior such as:

 Their current and anticipated demand for this type of product/service

 What they pay for similar products/services
 The quantity likely to be purchased
 Additional features they value.

With this customer information in mind, you can then develop a price comparison offering a
number of different product/service options for testing to help you determine a price range that is
acceptable.

Competitors:
In writing your marketing plan, you should have already determined who your direct competitors are and
how your business compares to them. This information can be useful in helping you determine your price
point. If you decide to use your competitors' prices as a guide, be careful that it doesn't dictate your prices
too much, as it can seriously undervalue your product/service and drive down your profits.

When you compare your business to competitors, it's also important to ensure you look at the
business as a whole and compare on other value-based traits (such as special features, quality and
customer service) as well as price.

Purchase of the Product:

Once all the options are evaluated, the consumer decides to buy a product. Purchase is the next
step. A customer might have choice for purchase influenced by the in store choices, sales persons
etc. One thing that could happen differently from a pre-planned purchase is the impulse
purchase. One might choose to buy something else because of the sales promotion that is going
on at that particular store. The customer could also find another product that is better value for
money than the one he indented to buy. The consumption of the product happens at the point
when the consumers use the products.

Post Consumption Evaluation:

The next stage is the post consumption evaluation when a customer is satisfied or dissatisfied
with the product. Customers are satisfied if the expectations are matched by the performance and
opposite if otherwise. If it is a satisfied customer, there are chances that the product might be
bought again. This leads to the consumer loyalty of the customer. The last stage of the consumer
buying process is the divestment where consumer has options to dispose or remarket the product
after the usage.

Homogenous good which are widely available are more prone to show evidence of price
sensitivity. For instance, very often the consumers are not agreeable to pay even a few cents per
gallon for gasoline, especially if a lower priced station is located nearby. Besides, some
consumers are more price sensitive as compared to others.
Consumers having fixed income or who are more frugal have a tendency to pinch pennies and
look around for lesser prices. In the meantime, some consumers with a higher income might feel
that searching for better deals many a times might not be worth their time thus being fewer prices
sensitive.
 CHAPTER – 2

LITERATURE REVIEW
Consumers’ price sensitivity is an important input to strategic and tactical decisions. Price
sensitivities depend on various factors for which our purpose of this paper is to explore
consumers’ price sensitivity and innovativeness as well as to contribute to adding information on
price sensitivity. This research reviews how consumers demonstrate their sensitivities to price on
their product purchase decisions. Consumer’s sensitivity to price has a significant impact on
product innovativeness as most of the product purchase decisions are being made based on price
rather than the brand or accessibility. Our discussions and findings will have important
implications for managers and researchers. Managers may get guidelines for taking their pricing
decisions to achieve maximum earnings while researchers can go for further study.

Price Sensitivity According to Some Research

Price sensitivity refers to the extent to which individuals perceive and respond to changes or
differences in prices for products or services (Monroe, 1973). Price research has typically
focused on routine decisions in response to changes in price (Bucklin et. al, 1995). Price format
(Dhar et. al, 1996). or price framing (Lichtenstein et. al, 1989). More than fifteen years ago, (Rao
1984) reviewed the “state of the art” of pricing research in marketing and found that it typically
focused on groceries in general and on consumer packaged goods in particular. This focus has
largely remained unchanged, with little work conducted with regard to goods or services
purchased outside the grocery store.

In some recent studies, some researchers have examined price sensitivity as independent variable
with regard to services (Lee et. al, 2001).And prescription drugs (Gönül et. al, 2001).Bundled
pricing also makes the partitioned components more important than when the prices are not
bundled.
Customers with moderate usage are least sensitive compared to low-end users (Abdullah-Al-
Mamun et. al, 2014). Higher perceived price shows greater monetary loss for customers, which
leads to lower purchase intentions.

Perceived Benefits and Price Sensitivity

Most of the literatures suggest that consumers’ evaluation of the value of a good or service is
based on their perceptions that what they actually receive and what they expected of having it
(Grewal et. al, 1998). Therefore, perceived value, usually defined in the literature as the ratio of
the perceived benefits of the goods or services to the perceived sacrifice in acquiring them
(Monroe, 1990).
Consumers might perceive the benefits of a good or service from different angles, such as
functional, social, emotional, and conditional (Sheth et. al, 1991) (Sweeney et. al, 2001).
Brief Discussion about Price Sensitivity According to the Articles
To know about customers’ price sensitivity is really a crucial part for a company because price
affects company’s profitability. Marketing executives make decision considering the supremacy
of the customers who can pull the company to its success. That is why; many companies are
coming out with the market research before launching its product in the market. On the other
hand, some other companies depend on the existing research and scholars’ opinion.

Service Quality and Price Sensitivity

According to (Tuha Munnukka 1984) University of Jyvaskylia, Finland- a customer’s price
sensitivity can be significantly explained by a customer’s level of satisfaction to operator’s
service regarding mobile service. He added that intensive and low-end users are most sensitive to
price changes while moderate users are less sensitive.
Moreover, a customer’s price sensitivity can be significantly explained by a customer’s price
perception. Perception is the process by which people translate sensory impressions into a
coherent and unified view of the world around them. We can also define that perception is the
process by which customers select, organize, and interpret information to form a meaningful
shadow of the relevant things.
Related to price perceptions and adoption of innovations, (Goldsmith et. al, 1997) found
shopping innovators to be less price sensitive than laggards.

Loyalty and Price Sensitivity

When customers are satisfied with the products or services, they buy the product again and
again. These customers become loyal to the company as well as its brand. Loyal customers are
very necessary for a company to build brand equity and to survive in the market by holding a
good portion of market share. Loyal customers are price insensitive to the price changes while
non-loyal customers are sensitive in making decision about a brand (Yoon et. al, 2011).

Their findings also give us the idea about the loyal customers. According to research, neither
99.9 percent not 0 percent cutoff level is optimal in segmenting the market into loyal and non-
loyal consumers assuming that the market consists of two kinds of consumers i.e. loyal and non-
loyal. Some other literatures also support that loyal consumers are price insensitive and non-loyal
consumers are sensitive to the price changes when they make decision to purchase (Brown,
1974) (Webster, 1965)( Krisnamurthi and Raj, 1991) (Massy and Frank, 1965) (Wernerfelt,
1991)
In the loyal segment, some consumers aim to purchase the same brand repeatedly because of its
nonmonetary features, whereas others do the same in response to the attractive promotional
offers. As an example, (Ailawadi et. al, 2001).Illustrate that the first type of loyal consumers—
namely, value conscious loyals—pursue specific brands because of their unique values and
features. (Chan et. al, 2008). Find that some brand loyal respond to price promotion by
stockpiling.
Online Customers and Price Sensitivity
Consumers are becoming online based buyers due to the faster expansion of the online all over
the world. It is more convenient for the online buyers to compare the products offered by the
various online sellers. It reduces the search cost for customers, facilitated partially by internet
shop bots, such as google.com, narrows price variation among the online vendors and ultimately
increases the competition (Bakos, 1997).

In competing with low customer search costs, many online vendors offer unexpected low prices
to attract their customers assuming that customers would buy products from the vendor who
offers the lowest price. Yet it is known to all that very few Internet vendors can survive by
adopting these low-cost strategies (Mahajan et. al, 2002). As a result, many of the online retailers
filed for bankruptcy and close their operations. This is because intense price competition
prohibited them from generating enough profits.

In spite of the existence of very low prices, the study also found that even price sensitive
customers do not always purchase products from online vendors that offer the lowest prices
(Smith et. al, 2001). Pricing is a critical decision for any business, and especially so for Internet
vendors. Another research found that trust is a non-price attribute which has a stronger effect
than price perception on online purchase intention.
 CHAPTER – 3
OBJECTIVES OF THE STUDY
OBJECTIVES:
 To analyze the behavior of consumer towards the price of the product.
 To identify changes in the demand of the product if prices are changed.
 To analyze the impact of price sensitivity on the sales of product.

SCOPE OF THE STUDY:

 The study will help us know more about people who are positively affected by price sensitivity.
 To know more about the people who are not affected by price sensitivity at all.
 This study will help us know more about the pricing techniques used by companies to attract
customers.
 This study will let us know more about the behavior of consumer regarding the price of the
product.
 CHAPTER - 4
RESEARCH METHODOLOGY
Research Instrument

The research is an exploratory as well as descriptive in nature. The research instrument used in
this research is a questionnaire with close-ended questions.

A well-structured questionnaire was prepared keeping in mind the objectives of the study. One to
one interaction with respondents was being done to ascertain their point of view on various
aspects which was covered in the structured questionnaire.

Then, the questionnaire was tested for its reliability and validity and distributed to the persons to
find out the Impact of Price Sensitivity on Consumer Buying Behavior.

Sample size

The sample size for this research was 100 respondents who were given the questionnaire to fill to
find out the results for the research.

Sampling Method

In this research, the data for the study was drawn from a number of respondents of different
age, qualification, profession and income level. The wide-ranging data provided by the
respondents was carefully examined in order to fulfill the objective and to reach on a relevant
conclusion.

Sampling Area

The scope of the study is Delhi- NCR.

Sources of data

Primary sources and secondary sources of data were used to carry out this research.
 Methods of data collection

Data was collected by distributing the questionnaire to the people who buy the products and
services by keeping in mind the price, and who are sensitive to the pricing level of product and
services in Delhi/NCR

Statistical instrument

In this research, Microsoft Excel, Google Forms, Microsoft Word and Google Scholar was
used to analyze the data to reach on conclusions.

Limitations of the Study

 The study collects data only from people who only consider price of the product while buying it.
 Study covers only some areas of north Delhi.
 CHAPTER - 5

DATA ANALYSIS & INTERPRETATION

 SECTION - A
Personal Details
1. AGE
TABLE-5.1

AGE RESPONDENTS PERCENTAGE

Below 18 25 25.00%
18 - 25 17 17.00%
26 - 35 27 27.00%
35 - 50 19 19.00%
Above 50 12 12.00%
TOTAL 100 100%

FIGURE-5.1

AGE

12%
25% Below 18
18 - 25
19%
26 - 35
35 - 50
17%
Above 50
27%

Interpretation:

The above table shows that 25% of the respondents fall under the age group of below under 18.
17% of the respondents fall under the age group of 18-25 years, 27% of the respondent falls
under the age group of 26-35 years of age, 19% of the respondent falls under the age group of
35-50 years and 12% of respondent are of above 50 years of age group.
2. GENDER

TABLE-5.2

GENDER RESPONDENTS PERCENTAGE

MALE 59 59.00%
FEMALE 41 41.00%
Prefer not to say 0 0%
TOTAL 100 100%

FIGURE -5.2

GENDER
0%

41% FEMALE
MALE
Prefer not to say
59%

Interpretation:

The above table shows that 41% of the respondents are Female and 59% of the respondents are Male.
3. MARITAL STATUS

TABLE-5.3

RESPONDENTS PERCENTAGE
Married 37 37.00%
Unmarried 63 63.00%
TOTAL 100 100%

FIGURE-5.3

MARITAL STATUS

37%
UNMARRIED
MARRIED

63%

Interpretation:

The above table hand figure shows that 63% of the respondents are unmarried and 37% of the
respondents are married.
4. QUALIFICATION

TABLE-5.4

Qualification RESPONDENTS PERCENTAGE

12th pass 31 31.00%
Under Graduate 48 48.00%
Post Graduate 14 14.00%
Others 7 7.00%
TOTAL 100 100%

FIGURE-5.4

QUALIFICATION

7%

14% 31% 12th pass

Under Graduate
Post Graduate
Others
48%

Interpretation:
The above table and figure shows that 48% of the respondents are under graduate, 31% of then
are 12th pass, 14% are post graduate and 7% people falls under others.
5. PROFESSION

TABLE-5.5

Profession RESPONDENTS PERCENTAGE

Student 44 44.00%
Business 19 19.00%
Services 25 25.00%
Others 12 12.00%
TOTAL 100 100%

FIGURE-5.5

PROFESSION

12%
Student
44% Business
25%
Services
Others

19%

Interpretation:

The above table and figure shows that 44% respondents are students, 19% respondents are doing
business, 25% respondents are from various service sectors and 12% respondents are from other
professions.
6. MONTHLY INCOME

TABLE-5.6

Income RESPONDENTS PERCENTAGE

Below 20000 59 59.00%
20000 -40000 6 6.00%
40000 - 60000 16 16.00%
Above 60000 19 19.00%
TOTAL 100 100%

FIGURE-5.6

INCOME

19%

Below 20000
20000 -40000
16% 40000 - 60000
59% Above 60000

6%

Interpretation:

The above table and figure shows that the monthly income of 59% respondents is below 20000,
19% respondents are earning between 20000–40000, 16% respondents are earning between
40000 – 60000, 6% of the respondents are earning above 60000.
 Section – B
1. Price is the greatest factor you consider while buying a product

TABLE-5.7

Various Response No. of respondents Percentage%

Strongly Agree 35 35

Agree 37 37

Neutral 8 8

Disagree 20 20

Strongly Disagree 0 0

Total 100 100

FIGURE-5.7

% of Respondents
40 37
35
35
30
25
20
20
15
10 8

5
0
Strongly Agree Agree Neutral Disagree

Interpretation:-In fig.1 35% respondents strongly agree that price is the greatest factor while
buying a product and 37% respondents are also quite but 8% respondents do not agree with this
statement and 20% respondents disagree with the statement.
2. Have you bought a product because of its price?

TABLE-5.8

Various Response No. of respondents %age

Strongly Agree 20 20

Agree 50 50

Neutral 16 16

Disagree 14 14

Strongly Disagree 0 0

Total 100 100

FIGURE-5.8

% of Respondents
60
50
50

40

30
20
20 16 14
10

0
Strongly Agree Agree Neutral Disagree

Interpretation:- In fig no. 2, analyses shows that 20% respondents says that they have bought a
product due to its price and 50% respondents also say the same but 16% are neutral and 14% are
disagree with the statement.
3. How well do price of a product catch your attention

TABLE-5.9

Various Response No of respondents %age

Strongly Agree 28 28

Agree 50 50

Neutral 8 8

Disagree 10 10

Strongly Disagree 4 4

Total 100 100

FIGURE-5.9

% of Respondents
60
50
50

40

30 28

20
8 10
10
4
0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no.3,28% respondents strongly agrees to the statement and 50%
respondents are also satisfied with statement, 8% respondents are neutral on the statement, 10%
respondents disagree and 4% respondents strongly disagree to the statement.
4. Would you consider not buying a product that is highly expensive?

TABLE-5.10

Various Response No. of respondents %age

Strongly Agree 20 20

Agree 48 48

Neutral 12 12

Disagree 16 16

Strongly Disagree 4 4

Total 100 100

FIGURE-5.10

%of Respondents
60

50 48

40

30
20
20 16
12
10
4
0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:- In fig no.4, 20% respondents strongly agrees to the statement and 48%
respondents agrees with the above statement12% respondents have a neutral opinion about the
statement 16% respondents are disagreeing with the statement and 4% respondents strongly
disagree withconsider not buying a product that is highly expensive.
5. Would you consider to bargain for an expensive product

TABLE-5.11

Various Response No of respondents %age

Strongly Agree 8 8

Agree 64 64

Neutral 12 12

Disagree 12 12

Strongly Disagree 4 4

Total 100 100

FIGURE-5.11

% of Respondents
70 64
60
50
40
30
20
12 12
8
10 4
0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no. 5, 8% respondents would consider to bargain for an expensive product
and 64% respondents also agrees to the statement and 12% respondents have a neutral approach
but 12% respondents are dissatisfied with the statement and 4% respondents are strongly
disagreeing on the above statement.
6. Would you consider the price of the product whose quality is poor

TABLE-5.12

Various Response No of respondents %age

Strongly Agree 16 16

Agree 42 42

Neutral 12 12

Disagree 10 10

Strongly Disagree 20 20

Total 100 100

FIGURE-5.12

% of Respondents
45 42
40
35
30
25
20
20 16
15 12
10
10
5
0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no6, 16% respondents strongly agrees with the statement and 42%
respondents also thinks the same and 12% respondents are neutral on the statement and 10%
disagrees with above statement and 20% strongly disagrees with buying a product whose quality
is poor.
7. Do you think sensitive pricing have more effect on consumers buying capacity

TABLE-5.13

Various Response No of respondents %age

Strongly Agree 12 12

Agree 60 60

Neutral 16 16

Disagree 12 12

Strongly Disagree 0 0

Total 100 100

FIGURE-5.13

% of Respondents
70
60
60

50

40

30

20 16
12 12
10
0
0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation: - In fig no.7, 12% respondents strongly agrees to the statement that sensitive
pricing have more effect on consumer buying capacity. 60% of respondents agrees to the same
and 16% respondents have a neutral approach and 12%respondents disagrees with the above
statement.
8. Would you switch from your regular product to a new product due to price

TABLE-5.14

Various Response No of respondents %age

Strongly Agree 16 16

Agree 28 28

Neutral 14 14

Disagree 28 28

Strongly Disagree 14 14

Total 100 100

FIGURE-5.14

% of Respondents
30 28 28

25

20
16
15 14 14

10

0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no.8, 16% respondents strongly agrees to the statement and 28%
respondents agrees to the statement and 14% respondents have neutral view on the statement and
28% respondents disagree to switch to different products due to price and 14% strongly disagrees
to the statement.
9. Do you think that having sensitive pricing on products have more effective sales than those
which don’t

TABLE-5.15

Various Response No of respondents %age

Strongly Agree 10 10

Agree 40 40

Neutral 22 22

Disagree 18 18

Strongly Disagree 10 10

Total 100 100

FIGURE-5.15

% of Respondents
45
40
40
35
30
25 22
20 18
15
10 10
10
5
0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no. 9, 10% respondents strongly agrees to the statement and 40%
respondents agrees to the statement, 22% respondents are neutral to the statement, 18% and 10%
people are disagrees and strongly disagrees with the statement.
10. Do you think in some cases price sensitivity affects customers negatively

TABLE-5.16

Various Response No of respondents %age

Strongly Agree 8 8

Agree 55 55

Neutral 28 28

Disagree 9 9

Strongly Disagree 0 0

Total 100 100

FIGURE-5.16

% of Respondents
60 55

50

40

30 28

20
8 9
10
0
0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no 10, 8% respondents strongly agrees to the statement, 55% respondents
agrees with the statement , 28% respondents are neutral towards the statement and 9%
respondents are disagreeing regarding price sensitivity affecting consumers negatively.
11. Have you ever rejected a product because of sensitive pricing

TABLE-5.17

Various Response No of respondents %age

Strongly Agree 8 8

Agree 48 48

Neutral 16 16

Disagree 24 24

Strongly Disagree 4 4

Total 100 100

FIGURE-5.17

% of Respondents
60

50 48

40

30
24
20 16

10 8
4
0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no 11, 8%respondents strongly agrees to the statements that is people
rejecting product because of sensitive pricing, 48% respondents agrees with the statement and
16% respondents are neutral with the statement but 24% respondents are disagreeing and 4%
respondents are strongly disagreeing with the statement.
12. Do you think price sensitivity is an effective tool to promote a product

TABLE-5.18

Various Response No of respondents %age

Strongly Agree 8 8

Agree 28 28

Neutral 24 24

Disagree 28 28

Strongly Disagree 12 12

Total 100 100

FIGURE-5.18

% of Respondents
30 28 28

25 24

20

15
12
10 8

0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no 12, 8% respondents strongly agrees with sensitive pricing is an

effective tool to promote a product and 28% respondents agrees to it 24% respondents are neutral
on the statement but 28% respondents disagrees with the statement and 12% respondents
strongly disagrees with the statement.
13. Do you think that price sensitivity ensures the customer confidence in their product and
services

TABLE-5.19

Various Response No. of respondents %age

Strongly Agree 0 0

Agree 36 36

Neutral 20 20

Disagree 16 16

Strongly Disagree 28 28

Total 100 100

FIGURE-5.19

% of Respondents
40
36
35
30 28
25
20
20
16
15
10
5
0
0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no 13, 36% respondents agrees to the statement and 20% respondents are
neutral but 16% respondents are disagrees with the above statement and 28% respondents
strongly disagrees with the statement.
14. Do you think that organization’s brand image and reputation is completely based on its
pricing technique

TABLE-5.20

Various Response No of respondents %age

Strongly Agree 16 16

Agree 32 32

Neutral 8 8

Disagree 32 32

Strongly Disagree 12 12

Total 100 100

FIGURE-5.20

% of Respondents
35 32 32
30

25

20
16
15 12
10 8

0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no 14, 16% of the respondents strongly agrees on the above statement.
32% respondents also agree to it and 8% of the respondents are neutral to the statement but 32%
respondents disagree to the statement and 12% respondents are strongly disagreeing with the
statement.
15. Would you consider the product becoming too expensive – so that it is not out of the
question, but you would have to give some thought to buying it

TABLE-5.21

Various Response No of respondents %age

Strongly Agree 28 28

Agree 40 40

Neutral 20 20

Disagree 8 8

Strongly Disagree 4 4

Total 100 100

FIGURE-5.21

% of Respondents
45
40
40
35
30 28
25
20
20
15
10 8
4
5
0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no 15, 28% respondents strongly agrees to the statement. 48%
respondents agree to the statement and 20% respondents are neutral to the statement but 8%
respondents disagree and 4% respondents strongly disagree with the statement.
16. Would you often shop at more than one store in order to find the best price

TABLE-5.22

Various Response No. of respondents %age

Strongly Agree 16 16

Agree 26 26

Neutral 20 20

Disagree 28 28

Strongly Disagree 10 10

Total 100 100

FIGURE-5.22

% of Respondents
30 28
26
25
20
20
16
15
10
10

0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no. 16, 16% respondents strongly agrees to the above statement. 26%
respondents agree with it too and 20% respondents are neutral to the statement but 28%
respondentsdisagree to the statement and 10% respondents strongly disagree to shopping in more
than one store to find the best price.
17. Do you feel that the money saved from shopping around is usually not worth the extra time
it takes

TABLE-5.23

Various Response No of respondents %age

Strongly Agree 12 12

Agree 52 52

Neutral 12 12

Disagree 16 16

Strongly Disagree 8 8

Total 100 100

FIGURE-5.23

% of Respondents
60
52
50

40

30

20 16
12 12
10 8

0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no. 17, 12% respondents agrees to the statement. 52% respondents are
also agreeing to the statement and 12% respondents are neutral to the statement but 16%
respondents disagree and 8% respondents are strongly disagreeing with statement.
18. Do you consider buying product from your favourite brand rather than the brand on sale

TABLE-5.24

Various Response No of respondents %age

Strongly Agree 0 0

Agree 48 48

Neutral 16 16

Disagree 20 20

Strongly Disagree 16 16

Total 100 100

FIGURE-5.24

% of Respondents
60
48
50
40
30
20
20 16 16

10
0
0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no 18, 48% respondents agree to the statement above and 16%
respondents are neutral to the statement but 20% respondents disagree and 16% respondents
strongly disagree with statement.
19. Do you often compare the pricing before buying the product

TABLE-5.25

Various Response No of respondents %age

Strongly Agree 22 22

Agree 38 38

Neutral 10 10

Disagree 20 20

Strongly Disagree 10 10

Total 100 100

FIGURE-5.25

% of Respondents
40 38
35
30
25 22
20
20
15
10 10
10
5
0
Strongly Agree Agree Neutral Degree Strongly
Disagree

Interpretation:-In fig no 19, 22%respondents strongly agrees to the comparison of prices before
buying the product. 38% respondents also agree to the same and 10% are neutral but 20%
respondents disagree and 10% respondents strongly disagree about the comparison of prices of
different products.
20. At what level do you think the ability of buyers to carry an inventory also affects their
price sensitivity

TABLE-5.26

Various Response No of respondents %age

Strongly Agree 12 12

Agree 30 30

Neutral 12 12

Disagree 6 6

Strongly Disagree 10 10

Total 100 100

FIGURE-5.26

% of respondents
35
30
30

25

20

15 12 12
10
10
6
5

0
Strongly Agree Agree Neutral Disagree Strongly
Disagree

Interpretation:-In fig 21, 12% respondents strongly agrees to the statement, 30% respondents
agrees with the statement, 12% are neutral, 6% disagree and 10% strongly disagree at what level
do you think the ability of buyers to carry an inventory also affects their price sensitivity
 CHAPTER – 5

FINDINGS
1. It has been found that the price is the greater factor while people buy product.
2. It has been found that the most people consider buying products because of its price.
3. It has been found that price of a product catch attention of most of the people.
4. It has been found that people are not willing to buy expensive products.
5. It has been found that people are willing to bargain for expensive products.
6. It has been found that the people are not willing to consider the price of the product whose
quality is poor
7. It has been found that sensitive pricing effect consumers buying capacity.
8. It has been found that people have mix responses to switching to a new product due to its price.
9. It has been found that sales are not that much affected due to sensitive pricing.
10. It has been found that sensitive pricing affects the customers negatively.
11. It has been found that people have rejected products due to sensitive pricing.
12. It has been seen that sensitive pricing is either good or bad tool for product promotion.
13. There can be seen that there is no majority the way people feel about ensuring customers
confidence in product through price sensitivity.
14. There is majority in the way people thinking brand image and reputation is based on pricing
technique.
15. Majority of the respondents are willing to a thought before buying an expensive product.
16. It has been seen that visiting more than one store in order to find the best price either good or a
bad idea.
17. Majority of people think that money saved from shopping around is usually not worth the extra
effort.
18. Most of the respondents are willing to buy products on sale rather than from their favourite
brand.
19. Majority of people compare the pricing of the product before buying it.
20. It has been found that ability of buyers to carry inventory is partially affected by price sensitivity.
 CONCLUSION
It is not an easy task for the concerned people to take decision about price. Price is not just only
an amount that customers pay for utilizing a product or having a service. Price is most
influencing factor for buying a product (consumers’ view) and for earning profit from selling the
product (manufacturers’ view). It is most influencing factor for buying because consumers are
rational; they have limited income as well as limited budget.

On the other hand, company can sustain in the market if and only if they can make profit which
totally depends on price. When a company is going to determine price of a product or service,
they need to think about the rationality of pricing that might include product’s quality,
availability of the alternatives in the market, types of product and category of entry into market.

If these are not well performed, consumers will show their negative sensitivity towards the
product not buying the product or buying the product in small portion. Different consumers
behave differently when companies increase or decrease the current price.

Truly, consumers are almost insensitive or not negative towards a product when price is reduced.
So, consumers’ sensitivity in pricing is a most important thing that should be highly treated by
the marketing executives as well as company’s top executives like CEO.
 Chapter – 6
RECOMMENDATION
It can be said undoubtedly that there are a lot of studies about price sensitivity. But, most of the
researches are related with the products not with the services.

I recommend that researchers should emphasize on the service sectors, such as banking, money
transfer or remittance, medical or clinical service (doctor and nurse), legal service (advocacy), air
services, etc.

Hopefully, this deprived service sector will be the emerging sector for the researchers because
customers are still switching from one alternative to other alternatives brands or service
institutions.
 SUGGESTIONS
1. To make a better change in future people need to see beyond the price of the product.
2. In INDIA people are getting more concerned about the other features rather than the price of the
product, so companies need to focus more on the features and less on the price of the product.
3. A suggestion can be made that people should be focusing more on purpose that they are buying
the product not on the pricing.
4. If a company has to make good profit then the product pricing should be competitive like its
competitors.
5. Not all the consumers get the price which they wish to buy the product for some bargain and
some dot so it is always good to bargain for an expensive product.
6. A customer should never consider a products price over its quality as it can cause problems for
the customers buying it.
7. Competitive pricing will increase the buying capacity of the consumer in a positive manner.
8. It is good to switch between different products over a period of time so as to know the
uniqueness of each product.
9. Sensitive pricing can affect the sales of the brand positively or vice versa.
10. Sensitive pricing cannot always be good for customers some have a negative impact on the
product due to sensitive pricing.
11. It is good to reject product because of sensitive pricing techniques used by different companies.
12. Sensitive pricing as an effective tool for promotion can work for some products but there are
various products whose promotional techniques work very differently.
13. Customer’s confidence about the brand can be easily checked by the price sensitivity.
14. Brand image and reputation is built by the quality of the product not by sensitive pricing.
15. People buy expensive products but which are within their budget line.
16. To know different products better people should go to different stores.
17. Money saved from shopping is always worth the extra effort.
18. People should try brands others than brand on sales so as to know the quality of each brand has
to offer to them.
19. People should compare prices of products before buying the product.
20. Buyer’s carrying capacity cannot always be increased by price sensitivity.
 References / Bibliography
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 https://magma.co.in/customers buying behavior / Accessed on 2nd April, 2018 03:45 PM

 https://economictimes.indiatimes.com/definition/price sensitivity Accessed on 11thApril,
2018 01:12PM
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 https://realty.economictimes.indiatimes.com/realty-check/price sensitivity on customers impact
Accessed on 16thMarch 2018 11:14AM
 Annexure
IMPACT OF PRICE SENSITIVITY ON CONSUMER BUYING
BEHAVIOR
QUESTIONNAIRE

Greetings!

I am a student of Banarsidas Chandiwala Institute of Professional Studies. As a part of our Summer

Training Project, I have undertaken the topic IMPACT OF PRICE SENSITIVITY ON
CONSUMER BUYING BEHAVIOR -. The data collected through this questionnaire will be used
only for academic purpose and will be treated with utmost confidentiality.

Section - A
Personal details:

Name:

Age: [ ] Below 18 [ ] 18 – 25 [ ] 26 – 35 [ ] 35 – 50 [ ] Above 50

Sex: [ ] Male [ ] Female [ ] Prefer not to say

Marital status: [ ] Married [ ] Unmarried

Occupation: [ ] Student [ ] Business [ ] Services [ ] Others

Qualification: [ ] 12th pass [ ] Under Graduate [ ] Post Graduate [ ] others

Income: [ ] Below 20000 [ ] 20000 – 40000 [ ] 40000 – 60000 [ ] Above 60000

 Section –B

1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5.Strongly Agree

S.No Statements SDA DA N A SA

1. Price is the greatest factor you consider while buying a

product
2. Have you bought a product because of its price?

3. How well do price of a product catch your attention

4 Would you consider not buying a product that is highly

expensive?
5 Would you consider to bargain for an expensive
product
6 Would you consider the price of the product whose quality
is poor
7 Do you think sensitive pricing have more effect on
consumers buying capacity
8 Would you switch from your regular product to a new
product due to price
9 Do you think that having sensitive pricing on products
have more effective sales than those which don’t
10 Do you think in some cases price sensitivity affects
customers negatively
11 Have you ever rejected a product because of sensitive
pricing
12 Do you think price sensitivity is an effective tool to
promote a product
13 Do you think that price sensitivity ensures the customer
confidence in their product and services
14 Do you think that organization’s brand image and
reputation is completely based on its pricing technique
15 Would you consider the product becoming too expensive –
so that it is not out of the question, but you would have to
give some thought to buying it
16 Would you often shop at more than one store in order to
find the best price
17 Do you feel that the money saved from shopping around is
usually not worth the extra time it takes
18 Do you consider buying product from your favourite brand
rather than the brand on sale
19 Do you often compare the pricing before buying the
product
20 At what level do you think the ability of buyers to carry an
inventory also affects their price sensitivity