Marketing aspects of consumer price perception

This thesis focuses on two theoretical approaches from the marketing literature: first, the degree to which consumers tend to associate a higher product price with a higher quality (price-perceived quality relationship) and second, the assumption that odd prices (prices set just below the nearest round figure) generate higher than expected demand at that level. The thesis concludes that there seems to exist an overall positive weak correlation between product price and perceived quality, which is also product/market specific, and that the effects of odd pricing on demand have been mixed and inconclusive. Important managerial implications arise from these conclusions. On the same grounds, an empirical study examines the relation between product price and actual product quality and shows that the relation is actually very weak for products falling into the category of electronics. Lastly, a second empirical study shows that odd prices prevail in the retail sector of the Czech Republic.