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 …show more content…
This strategy according to Kotler and Keller is effective to the ego sensitive product such as perfumes, cars and designer clothing (Kotler & Keller, 2014). Unlike odd or charm pricing, prestige pricing entails making “numerical values into rounded figures” (Boachie, 2016). Thus, consumer will rather buy bottle of champagne priced at $70 as oppose to $69.72. Recent studies in 2015, by Kuangjie Zhang and Monica Wadhwa showed that “rounded numbers such as $100 are fluently processed and encourage reliance on consumers’ feelings, compared to non-rounded numbers such as $99.99 which are less fluently processed and encourage reliance on cognition” (Boachie, …show more content…
While a Business to Consumer (B2C) are business that sells to individuals who pay for their own transaction. The process of reaching an acceptable price in the B2B market and B2C market differ. B2B product are typically large and complex and require extensive product knowledge. Their typically target their customer by using trade journals and catalogs. Which is then follow up with sales representatives who are knowledgeable about the product, they provide a demonstration of the product, and design a package the fits that company need. Within the B2B market, business are not price takers. Both companies enter into a contract, establish an account negotiate on a price result in a long-term
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 …show more content…
This strategy according to Kotler and Keller is effective to the ego sensitive product such as perfumes, cars and designer clothing (Kotler & Keller, 2014). Unlike odd or charm pricing, prestige pricing entails making “numerical values into rounded figures” (Boachie, 2016). Thus, consumer will rather buy bottle of champagne priced at $70 as oppose to $69.72. Recent studies in 2015, by Kuangjie Zhang and Monica Wadhwa showed that “rounded numbers such as $100 are fluently processed and encourage reliance on consumers’ feelings, compared to non-rounded numbers such as $99.99 which are less fluently processed and encourage reliance on cognition” (Boachie, …show more content…
While a Business to Consumer (B2C) are business that sells to individuals who pay for their own transaction. The process of reaching an acceptable price in the B2B market and B2C market differ. B2B product are typically large and complex and require extensive product knowledge. Their typically target their customer by using trade journals and catalogs. Which is then follow up with sales representatives who are knowledgeable about the product, they provide a demonstration of the product, and design a package the fits that company need. Within the B2B market, business are not price takers. Both companies enter into a contract, establish an account negotiate on a price result in a long-term