Today, let’s talk about how customers and competitors react when businesses change their prices. This is very important in pricing strategy.

First, imagine this: You always buy your favourite nasi lemak at RM2. Suddenly, the price goes up to RM3. How do you feel? You might still buy it if you really like it, but some people may stop buying or look for cheaper options. That’s what we call consumer reaction.

💡 When prices go up, customers may:

• Buy less

• Switch to competitors

• Complain or demand better quality

On the other hand, when prices go down, like when a clothing store offers big sales, customers might:

• Buy more

• Come back again (increase loyalty)

• Tell others (free word-of-mouth marketing!)

Now let’s look at competitor reactions.

When one company cuts its price — like a telco company offering cheaper internet packages — other companies will feel the pressure. They might:

• Lower their own prices to compete

• Improve their service or product quality

• Add promotions to attract customers

For example, in Malaysia, when Shopee or Lazada runs major sales like 9.9 or 11.11, other e-commerce platforms will usually follow with similar offers to stay competitive.

So remember students — price changes can affect buyer behaviour, and trigger a chain reaction among other businesses. Smart companies always observe and plan before making pricing moves.

Thank you!"