Festus Uwakhemen A. PhD
May 9,2023
Background
The concept of consumer behavior is derived from the combination of two words, consumer and behavior. In this case, consumers are individuals that use a product by virtue of exchanging it with an acceptable legal tender, while behavior deals with the mental and psycho-social reaction of individual in response to an external action or activity. According to Pahwa (2018) consumer behavior describes the action of individuals at the point of purchase of goods, during the process of using the goods as well as the after-use of the products.in this case; goods can either be physical products and/or services. Consumer behavior is closely related to the concept of utility which is the quantity of satisfaction a buyer gets from the use of a product or service.
Description of the Subject
Price is the most sensitive of all the 4Ps of the marketing mix as it is the only part of the mix that determines the direct turnover or cash inflow of the organization, as the other Ps conceptualizes cash outflow and overheads expenses for the firm. Also, price is highly sensitive because customers and consumers respond more to price than any other Ps. Firm’s products and services are positioned to her clients at reduced prices with respect to the price of its competitors’ products. The turnover of firms, public limited companies, cooperation or small enterprises is dependent on the constantly changing nature of consumer goods prices, which for the past decade has been dropping drastically due to instability in the Middle East, as well as economic recessions in developing nations across the globe. (Ottavio et al, 2018) Hence, the pricing of goods and services have ripple effect on the behavior of consumers, which goes a long way to determine profitability and business continuity for firms.
Researchers have been led numerous investigations to comprehend consumer behavior, for example: Manali Khaniwale (2015) has directed an examination which dissected the hypothetical parts of consumer behavior and the variables that impact it. Likewise, he investigated the connection between consumer behavior and the variables that impact the customer’s buying cycle and buy choice. His examination has adequate proof to demonstrate that the purchaser conduct is fundamentally affected by the buyer’s inner and outside factors. As indicated by H. Al-Salamin, J. Al-Baqshi, M. Al-Rassasi and H. Al-Salem (2015), their research results showed that the cost of notable brand items influences the buy interaction adversely. Albeit youngsters are keen on buying brand items, their low pay keeps them from the purchasing interaction while they are considered as a significant division for brand names. As indicated by Aysel Boztepe (2012), ecological mindfulness, green item includes, green advancement exercises and green value influence green buying practices of the buyers in certain manner. Segment qualities have moderate effect on model. Lefa Teng (2007) contended that when a value markdown with and without a base buy prerequisite is applied to a brand in a hold set, the brand moves from the buyers’ hold set to the thought set. Notwithstanding, the impacts of the two kinds of value limits on buyers’ perspectives and buy goals are not fundamentally unique. As per Junyean Moon, Doren Chadee, and Surinder Tikoo (2006), their outcomes demonstrate that independence is the solitary culture measurement to significantly affect buy expectation. Item type and independence by value communication additionally have a critical impact, though cost doesn’t. Bruce L. Alford and Abhijit Biswas (2002) contended that buyers’ degree of offer inclination impacts their assessment of each of the three result factors, while value cognizance impacts just pursuit aim. A major factor underlying the level of responsiveness of consumers towards making purchases and the pattern of making purchases is the price system in play within the geographical region where the study is to be conducted.
There are certain theories that can be used to strengthen the premise on the relationship between price and consumer behavior, and the two that would be explored in the course of this paper are the Social Exchange Theory and the Social Learning Theory. Social Exchange theory was propounded by Witchell (1984). The theory states that all relationships have a give and take direction, although the balance of this exchange is not always equal. Social exchange theory explains how we feel about a relationship with plains how we feel about a relationship with another person as depending on our perceptions of. The balance between what we put into the relationship and what we get out of it. The kind of relationship we deserve. In deciding what is fair, we develop a comparison level against which we compare the give/ take ratio.
Social Exchange theory is relevant when used within the Human Ecological Framework. This is because individuals make purchasing decisions within their micro- and macro system. Social Exchange Theory focuses on the tradeoffs people make when deciding between choices; benefits and costs are weighted and decisions are made. In other words, what will I have to forgo in order to make this purchase? This means that when individuals are irrational about choices they make, benefits and costs of the choices will be abnormally weighted, while decisions jumped into will be irrational. On the part of the Social Learning Theory, Social learning theorists accept the view of behaviorists that behavior is learned and the environment influences that development, but they reject the mechanistic view that altered behavior is a mindless response to stimuli. Social Learning Theory emphasizes the role of both cognition and environmental influences in development. We are all thinking creatures with some powers of self- determination, not just robots that show B response when A stimulus is introduced. We can think about what is happening, evaluate it, and alter our responses accordingly.
In a nutshell, the main purpose of this paper is to analyze through scientific research means, the effects of price on consumer behavior in the United States
Target Audience
This study is targeted towards the active working populace of the United States, mostly buyers who are capable of making purchases either at the point of sale or with the aid of online payment platforms (e-commerce stores) that leverages on the power of the internet.
Method
An online survey was utilized to gather quantitative data which served as the primary data for this study. Research specialists arranged a list of survey questions and a bunch of inquiries that were posed to the expected respondents. The primary source of data will be through questionnaire distribution meant for precise collection of effectiveness, attitudinal and socio-demographical data. For secondary data source, this includes information that will be generated from similar studies which have been previously put into writing, discussed or researched and have been in existence. The primary data that will be collected will be edited to detect and correct any omissions and errors to ensure consistency and completeness. Simple T-test was used to test the relationship between price and consumer behavior which are the two variables of the study. The analyzed data was presented in the form of descriptive statistics in frequency distribution, mainly tables, with the use of Statistical Programming for Social Sciences (SPSS) version 21 software programs for analysis.
Result
A total of two hundred and ten (210) copies of questionnaire were distributed and 201 copies were perfectly filled and retrieved.
Demographic Characteristics of the Respondents
| Table 1.1 Distribution of Respondents by Demographic Characteristics | |||
| Characteristics | Valid | Frequency | Percentage |
| Gender of the respondents | Male | 100 | 49.8 |
| Female | 101 | 50.2 | |
| Total | 201 | 100.0 | |
| Age of the respondents | 20-30 years | 61 | 30.3 |
| 31-40 years | 85 | 42.3 | |
| 41 years and above | 55 | 27.4 | |
| Total | 201 | 100.0 | |
| Marital status of the respondents | Married | 99 | 49.2 |
| Single | 96 | 47.8 | |
| Divorce | 6 | 3.0 | |
| Total | 201 | 100.0 | |
| Educational qualification of the respondents | B.Sc.//B.A.ED | 121 | 60.2 |
| MA/MSc/M.ED. | 75 | 37.3 | |
| Ph.D. | 5 | 2.5 | |
| Total | 201 | 100.0 | |
| Length of working experiences of the respondents | 0-10 years | 91 | 45.3 |
| 11-21 years | 77 | 38.3 | |
| 22-32 years | 26 | 12.9 | |
| 33 years and above | 7 | 3.5 | |
| Total | 201 | 100.0 | |
Source: Author’s computation with SPSS (2021).
Table 1.1 shows the distribution of the recipients according to gender, age, marital status, educational qualification and the length of working experiences of the respondents. 100(49.8%) respondents were male while 101(50.2%) were female. The means that there were more female than male counterpart in the study. The frequency distribution result on age of the respondents revealed that 61(30.3%) respondents were between 20 – 30 years of age, 85(42.3%) respondents were between 31- 40 years of age and 55(27.4%) were 41 years old and above. From this information, more respondents were capture within the youthful as it revealed that 42% fell within 31 – 40 years and 27.4% between the age of 41 and above. The implication of this is that, the study covered more aged people which enhanced the quality of the information provided. 99(49.2%) respondents were married, 96(47.8%) respondents were single and 6(3.0%) were divorced.
Analysis showed that 121(60.2%) respondents had B.Sc./HND/B.A.Ed., 75(37.3%) respondents had MA/M.Sc./M.ED. and 5(2.5%) respondents are Ph.D. degree holders. This denotes that majority of the respondents are first degree holders.
Finally, frequency distribution on the length of service of respondents, revealed 91(45.3%) respondents have been employees of private or public enterprises within 0-10 years, 77(38.3%) have been working for 11-21 years, 26(12.9%) have been employees for 22-32 years and only 7(3.5%) have been employees for 33 years and above.
| One-Sample Test | ||||||
| Test Value = 0 | ||||||
| t | df | Sig. (2-tailed) | Mean Difference | 95% Confidence Interval of the Difference | ||
| Lower | Upper | |||||
| X | 22.543 | 3 | .000 | 19.25000 | 16.5325 | 21.9675 |
| Y | 15.584 | 3 | .001 | 14.75000 | 11.7379 | 17.7621 |
Source: Likert Scale.
| Model Summary | ||||
| Model | R | R Square | Adjusted R Square | Std. Error of the Estimate |
| 1 | .077a | .006 | -.491 | 2.31146 |
| a. Predictors: (Constant), X | ||||
Source: Likert Scale.
| Coefficientsa | ||||||
| Model | Unstandardized Coefficients | Standardized Coefficients | t | Sig. | ||
| B | Std. Error | Beta | ||||
| 1 | (Constant) | 16.400 | 15.087 | 1.087 | .391 | |
| X | -.086 | .781 | -.077 | -.110 | .923 | |
| a. Dependent Variable: Y | ||||||
Source: Likert Scale.
The least squares equation y = a+ bx
From the regression coefficient analysis, our regression model is of the form
y = 16.400 -0.086x
The t-test results reveal a t-cal = 0.923. With a t-sig at .923 > 0.05 level of significance, we therefore conclude that there is a positive relationship between price and consumer behavior, which means that the price of goods and services influences the action and reaction of consumers in the market.
Conclusions and Recommendations
Individuals increasingly utilize consumption as an alternative way to express and create self-identity, or social status (Soper, 2007; Faber, 2004). As a result, consumption has become the social standard of leisure and lifestyle that is essential, easily accessible, and encouraged by society (Mueller et al., 2007; Neuner et al., 2005). The attitude of individuals towards money is driven by the active consumer culture and price strategies practiced by firms that are becoming increasingly widespread in many countries (Dittmar et al., 2007).
A study of this nature would be instrumental to Consumer Behavior in term of price and type of effect (good or bad) that these independent variables will have on it. This is due to the fact that economic analysts, marketers and researchers will benefit a lot from this study.
Also, the concept of consumer behavior and its attendant psychological reactions has been a trending issue that researchers in the field of psychology has over the years developed interest in studying . This is because knowing the reasons why these people develop attitudes of consumer behavior will not only afford the researchers an opportunity of explaining it to the society, but of also proffering a long lasting solution to it. Economic and social factors are likely to influence consumer behavior. The findings can help government, public policy makers, and banking institutions to understand incidence of consumer behavior among consumer particularly consumers within the United States and to frame policies to tackle it.
In view of the paper’s decision, retailers and sellers are prescribed to deliberately contemplate buyers’ consumer behavior which is quite possibly the best approaches to know buyers’ inclinations when settling on a buy choice and to set reasonable costs to their things as valuing straightforwardly affects an organization’s income and subsequently to its prosperity. It is prescribed that to section shopper dependent on segment qualities and study cautiously their requirements and readiness to purchase items or administrations. Besides, here is a significant factor that influences individual’s consumer behavior in sure manner which is corporate social obligation (CSR). In the event that the organization socially capable and report that the piece of this installment of chose items will give to non-benefit association or for occasion inside society, which will urge shopper to choose the items incautiously.
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