Consumers and increasing price sensibility

There is a traditional way of conceptualising the Status Consumption Scale-SCS (Eastman, Goldsmith, Flynn, 1999). At one extreme, the concept embraces the rigidity of the price; at the other, the competitive advantages of quality (involvement, innovativeness, and brand loyalty). The factors at the latter extreme minimise price sensitivity and in most cases are linked to higher prices. Price-based competitive advantage works the other way, raising price sensitivity and almost always coincides with lower prices. Over the last decade, a set of new factors has come into play, changing the traditional concept of price sensitivity, leading most consumers towards a new relationship, to wit: pricing for value (De Jaime Escala, 2007). This new paradigm means a new ordering of criteria in consumers' minds when they buy something, such that quality-linked factors (involvement, innovativeness and brand loyalty) and price-linked factors (low prices) break the old rules, spreading the paradigm throughput the Status Consumption Scale and giving rise to hybrid consumers. The consumer evaluates the price he is willing to pay for perceived value, right across the board from the dearest products to the cheapest. There is currently strong demand for low prices-something that was spurred on by the 2008 economic crisis. Our aims in this paper are: (1) to discover the factors impinging on the new consumption scenario; (2) use these factors in subsequent analysis to discover the types of consumers emerging as a result. To achieve the analysis, we isolated the internal and external factors affecting the new scenario. Using these factors allowed us to identify groups of hybrid consumers whose decisions are based on pricing-for-value. There are also consumer groups that stick closely to either the value or to the price criterion. However, these groups are much less clearly-defined than hitherto, given that they have been 'contaminated' by the new scenario. As a result, there are now two main groups of consumers-Rational Shoppers and Hybrid Shoppers-who mix attributes linked to value and price across a continuum. The results shed light on the new relationship between pricing and value. They also put brands in the spotlight, helping new brand strategies to be drawn up, providing scope for new interpretations of brand strategies for both manufacturers and distributors facing hard times and pressure to cheapen their products.