Do you ever wonder why some products bear prices with rounded numbers (i.e., $12.00), while others are exact (i.e. ,$11.36) or end with ‘9?’ Does the physical placement of prices matter? Why are we sometimes offered three products from which to choose?
All of the examples above point to the psychology of pricing. The way our brain perceives value and cost is often influenced by subconscious tendencies. In order to develop successful sales, pricing and positioning strategies for products, it is useful to understand these well-tested techniques of pricing psychology.
For instance, research has shown that consumers are drawn to rounded numbers for emotional purchases, while non-rounded numbers are more appealing for rational purchases. This is because when something costs $100, consumers tend to rely on their feelings, while on the other hand, when something has an irregular price – such as $97.68 – consumers have to use reason to calculate and deliberate whether it is a good price.
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