Question

What is psychological pricing, and how is it used by sellers? Give an example.

Answer 1

Let us take an example of your own self. You so into the store to purchase something particular but when you come out you have bought more than you need but that is not your blunder it happens due to the psychological pricing strategies stores use to boost you to buy and spend more than you want to do.

Psychological pricing is the marketing methods of introducing prices lower than a whole number. Main thought after this pricing is that customers will perceive the somewhat lowered price and think that price is actually lower than it is.

The important advantage of this Psychological pricing is that it makes customer view the product as they want without actually changing the product.

How sellers use it?

1. Charm pricing: Rs. 999 looks better than Rs1000 and that's where a customer gets trapped by the charm of 0.99$. Technically there is a difference of only 1 cent but our mind perceives it in a different way and we buy that product.
   For example, you see a new car in showroom whose price is $6,99,000 rather than at Rs 7,00,000. A wise customer knows that the price difference of Rs 1000 is little for such a valuable item as a brand new car. But all customers don’t necessarily think and behave logically. Many of them may look at that price and think it like Rs. 6,00, 000.

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