PRICING STRATEGIES AND CONSUMER PERCEPTIONS – A STUDY OF SKIN CARE PRODUCTS

The current research paper proposes to understand the perceptions of the respondents with respect to the prices of the skin care cosmetic products. Price is one of the crucial elements of marketing mix as it the only revenue generating variable for companies. Further, price is the most sensitive area of decision making and any pricing mistake decreases the profitability of the concern. In view of the significance of pricing in determining the profitability of companies, marketers must understand the prerequisites for successful pricing. One of the prerequisites for successful pricing is to understand how price works in the market place and secondly in identifying the consumer perceptions about prices and price changes. Price elasticity is the measure to estimate the extent of variation in the demand due to price variations. Pricing in skin care category is under consideration as skin care segment is not only the leader in the personal product industry but shows immense growth potential with per capital usage of skin care products in India still being low. In an attempt to understand how consumers perceive the value of the products and their prices and the reactions for price variations of skin care products, primary data has been collected. The sample is a convenience sample covering females belonging to Hyderabad and Secunderabad. The college going girls, working population and home makers who are of 18 and above years of age constitute the sample. The impact of the independent variables age, income and occupation on the perceived value, price elasticity and perceptions of the consumers about skin care product prices is analysed. Interestingly, in the skin care category, price elasticity is less for a hike in the price of the products while price elasticity is higher for price reduction. Besides, the skin care products are considered as costly irrespective of whether they are natural products, international brands or national products. Despite the fact that the skin care products are perceived to be costly, respondents buy them as the use of the products is considered to be essential to maintain the skin tone