Pricing Strategy For Products Based On Consumer Choice

2008 is a hard year for both China and the world. Many foreign companies choose to move to China which is less influenced by the financial crisis, and hope to find some chances. But Chinese consumers have their unique characters. For one thing, the Chinese consumers are composed of several subsections which can be divided according to area, product category, buyer and so on. And there are great differences among subsections. For another, the purchase process of Chinese consumers is very special, for example, 80% of Chinese consumers will recommend the product to others after purchase. So studying on the preference and purchase behavior of the Chinese consumers is important to those foreign companies which aim to occupy the Chinese market and those domestic enterprises which face much pressure and competition from both home and abroad.In this thesis, first many kinds of pricing methods are introduced and their strengths and weakness are summarized. Second, it points out that under the circumstance of buyers'market, because the customer-oriented pricing method can grasp the demand and willingness to pay of consumers and fully explore the market potential, this method should be the first choice for companies. When researching on customer-oriented pricing, research of consumers is necessary. After doing investigation on consumers, the model of consumers'purchase choices can be obtained, named consumer choice model, which is a quantitive method. The concept of'perceived price'is defined and modeled, and introduced into consumer choice model to improve the Probit model. Under multi-product perceived prices, a pricing strategy is established based on consumer choice.The proposed consumers'product selection process is actually a perceived process. Consumers perceive the value of products according to the product informations, which become their perceived price. Comparing with the market price, they make decision whether to purchase or not. Then the companies make prices for their products to maximize long-term profit based on consumers'selection process. At the end of the thesis, different consumers'characters and manufacturers'goals are also taken into account. An example shows the validity of the method.