The sellers of products do not want customers to know the cost of the products and services. They want consumers to think their rates are warranted. They advertise that their goods and services offer unique advantages and have been able to persuade consumers to pay higher rates for their offerings. Buyers, however, would like to know the cost of the items they are purchasing. They want to see if the vendor is overcharging them. The fair price to be paid to buyers is the real cost plus a proportional benefit to the vendor. Therefore, because they know the vendor’s expenses, they are not in a position to know if the rates paid by the sellers are fair. It isn’t easy to calculate the actual expense of the seller. Customers are seeking to conclude these costs when comparing rival products or offerings. They assess the more expensive products by using the cheapest brand’s price and ascertain if it provides the quality or status that supports higher costs.
It is sometimes possible that a new entrant may offer a quality product comparable to that of the incumbent, albeit at a lower price. At this point, consumers may believe that the incumbents have overpriced their goods and have gained high profits. They will compel the incumbents to lower their rates. Big businesses have been pressured to cut their costs due to unfavorable consumer views of their pricing policy. Customers shall draw up their comparison prices from multiple outlets, including their familiarity with the commodity, advertising, hearings from other customers or retailers. All of these outlets allow the consumer to establish his opinions about the commodity’s costs, efficiency, and characteristics.
The pricing of goods and services is essential, whether online or in a physical store. Market pricing is the price that customers can pay; they will consider the name, the business, the prestige, and the quality (Purely Marketed 2018). Any of the Internet’s price consequences are price transparency, reduced price demand, and new pricing policies (Chaffey & Ellis-Chadwick 2016, p. 268). The Internet has affected pricing techniques. Consumers thus have access to enhanced knowledge, enabling them to find and compare items at the right price.
The Internet has made the hunt for facts simpler. Knowledge of the Internet made the search process more useful for the user. It does not have to hop from one store to another to equate the services of various suppliers. The Internet contains comprehensive knowledge of costs, specifications, and product consistency. Customers should compare the prices, features, and quality of goods and services provided by different vendors. There are websites whose only task is to allow clients to make those distinctions. There are web directories of product reviews and ratings. Purchase consumer experience is now freely accessible on the Internet. And as buyers know more about the costs, specifications, and consistency of various retailers’ goods, their long-standing conceptions of how price and cost are related continue to crumble. Reverse auctions encourage shoppers to see the price of the floor more quickly than they do for conventional shopping. Costs have been made more visible.
Even if consumers can easily calculate the real cost of producing the product, those goods that have higher quality will continue to be favored. These goods would have the potential to charge consumers higher rates. However, it is essential to differentiate between genuine quality change and conveying the impression of being a higher quality commodity without really being one. In the above scenario, customer satisfaction may be lost, and the company could also be on the receiving end of the customer’s wrath.