SOME ISSUES IN PROCESSING OF PRICE INFORMATION A SOFT COMPUTING APPROACH

Price plays an important role for determination of price of goods or services; which see the buyers perception value not the sellers’ cost, as key to pricing. The basic idea behind this approach is quite simple, the buyers balance the benefits of a purchase against its costs. When the benefits outweigh the costs and when the particular product under consideration had the best relationship of benefits to cost, the buyer purchases the product. Even though the concept is simple, the real problem arises to make it operational, particularly to define product benefits and costs in terms of the buyer’s perspective.

In this research work various hypotheses are formulated to analyse how do buyers perceive, process and store price information. The logic of each hypotheses are adopted from micro-economic theory, behavioural science, statistical and soft-computing techniques etc. One such mathematical model based on regression analysis is implemented using logistic/logit regression (LR), which is binary in nature. Similarly soft-computing methods like artificial neural networks (ANN) are implemented as it can provide economical and competitive solutions to the real – world problems, where difficulty is posed due to multi-modality, non-linearity, non-differentiability and non-availability of closed form function definition for finding the global solution. A comparative analysis lead to a path of new horizon.

The basic objective of this research work is to understand the way buyers assimilate and retrieve the price information and this processing of price information is mainly influenced by the ‘economic’ and ‘behavioural’ principles, even though they contradict their views on price knowledge of the buyer. Traditionally, economists have assumed perfect price knowledge of the buyer during purchase situations but the empirical research shows that such assumption is not proper as most of the buyers are not able to recall the price information and thus, there exist a difference in these views. By implementing different methodologies the analysis throw some light to reconcile between these views and the detailed objectives of this research work can be underlined as follows; To analyse, the characteristics of processing and storage of price information.