“If a Ferrari Was 20k Would They Be as Desirable? Discuss the Relationship Between Price, Consumer Behaviour and Marketing Activities.”

Ferraris are a luxury good, known for their performance and prestige with prices of up to £500,000. In this study there will be an effort to evaluate if a Ferrari would still be as desirable if it was available at £20,000. To do this we must examine the relationship between the behaviours of consumers and price with a further examination of marketing activities. Firstly we need to define what consumer behaviour, price and marketing activities are, by understanding the consumer we can then create products that meets their wishes and needs which is vital in achieving success. An investigation of the Utilitarian (rational) consumption model will follow allowing the identification of driving factors that affect consumer’s decisions. This allows the introduction of Pricing, viewing towards perceived quality and value. The contrasting Hedonic view allows the introduction of socio-psychological factors on consumer behaviour such as personality and social class. We must appreciate our level of involvement with the product and what factors this may cause. This will allow us to fully appreciate whether the change in price will result in the Ferrari still being as desirable as when it was at a higher price. The study of consumer behaviour “is the study of the processes involved when individuals or groups select, purchase, use or dispose of products, service, ideas or experiences to satisfy needs and desires” (Soloman et al, 2002, p4). Therefore by studying what factors affect how and why consumers make these consumption decisions, marketers may be able to understand and therefore adapt to these decisions. Consumer behaviour incorporates ideas from many different disciplines such as psychology, sociology and economics. (Schiffman and Kanuk, 2000), in a marketing context we take note of all these concepts and try to come to a balanced answer. A full examination of consumer behaviour looks at how consumers maximise their utility (satisfaction) based on a cost-benefit analysis