Pricing Cues
The textbook author included a case about the different pricing cues. While reading this case I learned that prices ending in 9 not only show signs of a bargain but it can also increase demand. The case author says in one study involving women’s clothing, raising the price of a dress from $34 to $39 actually increased demand by a third. I did not know raising a price could also increase sells, I guess that’s the power of 9.
On page 318, there is a table showing the different pricing adjustment strategies. There are seven different adjustment strategies, but the case is mostly related to the third strategy: psychological pricing. Psychological pricing is the pricing that considers the psychology of prices not the economics. The …show more content…
This strategy is used to bring more customers into the store and hope they send money on other purchases. The case author mentions Walmart’s Super Saturday last year, although the retailer lost money on every loss-leader item it sold, the low prices increased store traffic and purchases of higher-margin products made during the same shopping trip. Although Walmart lost money with their leader-loss items, I am sure that didn’t really matter since they got higher sales on the more higher-priced items. This too can also be seen as a sort of promotional pricing and discount pricing, most likely I can see companies doing this during a seasonal …show more content…
Nowadays price matching has become a very popular strategy. I remember when only a few companies did price-matching, but now companies are now even doing price-matching with Amazon. Price-matching is when a company promises to match or beat a competitor’s price, if it is lower than what they charge. I really just stick to Amazon, price matching really is not a big deal to me. The case author tells us that consumers are usually confident that they’ll be paying the lowest price on eligible items, but some manufactures make it hard to take advantage of price matching policies by introducing “branded variants”— slightly different versions of products with different model numbers for different retailers. So if a customer does go to a store looking to price-match they may not even be receiving the same product they came to buy. It seems that dynamic and internet pricing can be part of price-matching, companies are price-matching with Amazon (online-only
The textbook author included a case about the different pricing cues. While reading this case I learned that prices ending in 9 not only show signs of a bargain but it can also increase demand. The case author says in one study involving women’s clothing, raising the price of a dress from $34 to $39 actually increased demand by a third. I did not know raising a price could also increase sells, I guess that’s the power of 9.
On page 318, there is a table showing the different pricing adjustment strategies. There are seven different adjustment strategies, but the case is mostly related to the third strategy: psychological pricing. Psychological pricing is the pricing that considers the psychology of prices not the economics. The …show more content…
This strategy is used to bring more customers into the store and hope they send money on other purchases. The case author mentions Walmart’s Super Saturday last year, although the retailer lost money on every loss-leader item it sold, the low prices increased store traffic and purchases of higher-margin products made during the same shopping trip. Although Walmart lost money with their leader-loss items, I am sure that didn’t really matter since they got higher sales on the more higher-priced items. This too can also be seen as a sort of promotional pricing and discount pricing, most likely I can see companies doing this during a seasonal …show more content…
Nowadays price matching has become a very popular strategy. I remember when only a few companies did price-matching, but now companies are now even doing price-matching with Amazon. Price-matching is when a company promises to match or beat a competitor’s price, if it is lower than what they charge. I really just stick to Amazon, price matching really is not a big deal to me. The case author tells us that consumers are usually confident that they’ll be paying the lowest price on eligible items, but some manufactures make it hard to take advantage of price matching policies by introducing “branded variants”— slightly different versions of products with different model numbers for different retailers. So if a customer does go to a store looking to price-match they may not even be receiving the same product they came to buy. It seems that dynamic and internet pricing can be part of price-matching, companies are price-matching with Amazon (online-only