Consumers infer that a higher price signals a higher quality, but at the same time, the higher price indicates a greater monetary sacrifice in purchasing the product. Consequently, the trade-off between perceived quality (i.e., gain) and perceived sacrifice (i.e., loss) results in perceived value.

How does price affect customer satisfaction?

Research suggests that as prices increase, so does the customers’ perception of the quality of the products being sold. … Using very low pricing for your products can also make the customer more aware of its quality in general, and they may be more likely to identify faults or potential shortcomings.

What affects perceived value?

The desirability of a product, quality, how well it meets the expectations of customers and its price in relation to other similar products are important factors in perceived value. Customers are quick to give their opinion of a product or service based on how well it has satisfied them and its cost.