Consumers' Price Perceptions as a Segmentation Criteria: An Emerging Market Case

Abstract

The main purpose of this study is to explain price perception heterogeneity in terms of behavioral and psychological variables related to price. The second purpose is to attempt to determine the segments of customers based on their price perceptions. In order to measure price perception, a multi item scale is developed from various existing scales and through focus group interviews. Data are collected from a sample of 600 supermarket customers. Structural equation modeling, cluster analysis, and chi- square analysis are used to reach research objectives. Validity and reliability tested scales used in this research are verified to be appropriate. As a result of these analyses, it is found that the customers can be clustered into four different groups or clusters according to price perceptions construct. These clusters can be used for segmentation purposes. Different cultures, different demographics might cause differences in price perceptions. Therefore, comparative research can create useful insides in this regard. Four different segments developed in this research will help business managers to optimize their business and marketing plans and their execution. Characteristics of these clusters will also contribute to improve marketing strategies and tactics. First of all, a new dimension, namely domestic-national sensitivity is included in the price perception model first time. Secondly, this research also indicates that validity and reliability-tested scales can be used in further studies. This study shows that price perception based segmentation can be done.