What is Psychological Pricing?
The marketing strategy used to attract customers is the psychological pricing technique.
The pricing strategy of products is manipulation techniques that play a vital role by subconsciously affecting our buying decisions. Have you ever visited the departmental store and walked out getting all the unnecessary stuff? It is psychological pricing technique.
Now, let us discuss the various strategies used for pricing the products.
Charm Pricing is one of the most common pricing techniques adopted by businesses. The strategy behind charm pricing is to end the price with 99 or 999 or reducing the starting number by one, which increases the selling probability of the product.
Exclusive/ Prestige Pricing is the opposite of the charm pricing technique. This type of pricing strategy targets those who associate higher price with exclusive products. Most of the luxury brands use premium pricing tactics to sell a lifestyle more than a product. The companies put forward the premium price because they attract consumers to buy their products based on exclusivity and not value.
Visibility Pricing is a visual tactic used for writing the prices in small fonts. Many companies adopted this strategy to target those customers who perceive the cost of the product by its font, size and colour. According to a study, visibility pricing techniques trigger the customers, as they interpret the difference among the price visually. Using a different font and size of the selling price and placing it away from the actual price, helps increase the purchase of any product.
Instalment Pricing is breaking up the total cost of a product into smaller segments. This type of pricing tactic is popular with the products offering monthly plans such as OTT platforms, gym, sports club or any product that allows payment in instalments. Instalment pricing for any product is more appealing to the customers than rounded off numbers.
Comparative Pricing strategy is helpful when the customer purchase based on emotions and not numbers. It involves similar products placed simultaneously but with different pricing. Comparative pricing strategy appeals to the emotional side of a customer who comes in to get desirable products. In such cases, budgets are usually flexible because the purchase made is based on how much they liked the product.
BOGO Pricing is the most commonly used tactic to allure the customers. The strategy used behind this is to offer a free product or service on paying the actual price for one. Buy One Get One or BOGO pricing targets the greed in consumers who forgets logic and focuses on purchasing to get the free product.
Psychological pricing is a vast and complex subject as the strategies differ based on many constraints including, price and products.