You Do: how might you use psychological pricing to increase sales of your product or service
Video: Psychological Pricing (embed video)
Team do:
1. What philosophy governs supermarket psychology today?
1. Shortcuts to the wallet.
2. What is the impact of the word “special”?
1. Psychological process: special=good
2. Scarcity effect: on special=only for short time
3. What is the impact of packaging?
1. Packaging confirms concept of quality=high price http://www.youtube.com/watch?v=yzRDEKyqIJs&feature=player_embedded Perceived-Value Pricing
Many companies base their pricing strategy on customer’s perceived value. Value delivered must be value promised in their value proposition and customer must perceive other marketing mix constituents like advertising …show more content…
They introduce a main product and keep adding more and more items to the mix to build value — while simultaneously “discounting” the retail price.
But wait…if you buy now you get…
You do: develop at least 2 psychological pricing strategies for your product or service
Competitor-Based Pricing
When pricing your product or service you must take your competitors cost, prices, and potential reactions into account while at same time remaining within array of possible prices dictated by demand and costs.
You should always be aware of your closest rival’s price.
If your product has features or capabilities beyond its closest competitor their worth to your customer should be monetized and added to that of competition when determining your product price.
At this point you can decide if you want to charge more, less, or the same as your competitor.
Be aware, your competitors will quickly sense your presence in marketplace and may change their own prices to compete with you.
If there is strong competition in a market, customers will certainly be aware of what is a reasonable or normal price. Customers face a wide choice of who to buy
Video: Psychological Pricing (embed video)
Team do:
1. What philosophy governs supermarket psychology today?
1. Shortcuts to the wallet.
2. What is the impact of the word “special”?
1. Psychological process: special=good
2. Scarcity effect: on special=only for short time
3. What is the impact of packaging?
1. Packaging confirms concept of quality=high price http://www.youtube.com/watch?v=yzRDEKyqIJs&feature=player_embedded Perceived-Value Pricing
Many companies base their pricing strategy on customer’s perceived value. Value delivered must be value promised in their value proposition and customer must perceive other marketing mix constituents like advertising …show more content…
They introduce a main product and keep adding more and more items to the mix to build value — while simultaneously “discounting” the retail price.
But wait…if you buy now you get…
You do: develop at least 2 psychological pricing strategies for your product or service
Competitor-Based Pricing
When pricing your product or service you must take your competitors cost, prices, and potential reactions into account while at same time remaining within array of possible prices dictated by demand and costs.
You should always be aware of your closest rival’s price.
If your product has features or capabilities beyond its closest competitor their worth to your customer should be monetized and added to that of competition when determining your product price.
At this point you can decide if you want to charge more, less, or the same as your competitor.
Be aware, your competitors will quickly sense your presence in marketplace and may change their own prices to compete with you.
If there is strong competition in a market, customers will certainly be aware of what is a reasonable or normal price. Customers face a wide choice of who to buy