FEATURES OF PRICING IN THE ORGANIC FOOD MARKET AND ASSESSMENT OF PRICE PERCEPTION USING PSM METHOD (Price Sensitivity Measurement)


Astratova G.V., Lagutina E.E., Rushitskaya O.A.

The article illustrates the theoretical and methodological aspects of pricing with respect to the food market as a whole and to the organic food market in particular. It is revealed that food products have specific features of pricing, due to the seasonality of production and high costs that accompany the entire "food chain" in the marketing system. With regard to organic food products these costs are even higher. This price premium, in our opinion, is not only the compensation for incurred and future costs of the economic entity in organic food market but it is an illustration of intentions to get additional revenue in the growing market segment of the food market. The authors conduct the applied research: determine consumers` price sensitivity, develop cumulative cost curves of cream with 40% fat, obtained on the basis of the PSM standard method procedures. It is proposed to use, on the one hand, the state of the market regulation instruments to partially offset the costs of agricultural producers for organic food production. On the other hand, the authors consider it appropriate to use both pricing and marketing tools, such as the PSM method, which allows determining the psychological price perception, consumers` willingness to buy organic food at the estimated price. Keywords: price, pricing, psychological price perception, consumer behavior, marketing, organic marketing, food market, organic food market.

Galina V. Astratova, Doctor of Economics, Candidate of Technical Sciences, Professor, Director of the Institute of the Quality of Life - the Ural State Forestry University; Eugene E. Lagutina, Candidate of Economics, Associate Professor. - The Ural State Pedagogical University; Olga A. Rushitskaya, Candidate of Economics, Associate Professor, Head of Management and Economic Theory Department, Director of the Institute of Economics, Finance and Management. - The Ural State Agricultural University - Yekaterinburg city.


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