Marketing Strategy Of Psychological Pricing Essays

755 Words Nov 17th, 2016 4 Pages
Consumer are driven by bargain and they will purchase a product if they believe that the value they receive is more than the price they pay. In determining price marketers uses a strategy of Psychological pricing. Psychological pricing “is a pricing/marketing strategy based on the theory that certain prices have bigger psychological impact on consumers than other” (Boachie, 2016). Marketers play on consumer psychology by using a strategy called Charm pricing, this involves using pricing that end in odd number such as 5,7,9 or 99.
The concept behind charm pricing is to reduce the left digit from a round number by one cent (Boachie, 2016). According to Kotler, customers see an item priced at $299 as being in the $300 rather than the $300 range (Kotler & Keller, 2014). The reason for this according to research conducted by Thomas and Morwitz in 2005, it is believed that, “nine ending prices will be perceived to be smaller than a price one cent higher if the left- most digit changes to lower level example $3.00 to $2.99 but not is the left-most digit remains unchanged example $3.60 to $3.59” (Boachie, 2016). Walmart is known for this practice with their roll back price that offer use round number such as $4:98.
Marketers understand that consumer associate price with quality inference or prestige pricing strategy. This strategy according to Kotler and Keller is effective to the ego sensitive product such as perfumes, cars and designer clothing (Kotler & Keller, 2014).…

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