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Psychological Pricing

Published on Dec 25, 2015

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1.

Psychological Pricing

based on a theory that certain prices have a psychological impact
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2.

It is where they put .99 on the end of products and/or in doing so, lower the price by 1%.

Retail prices are often expressed as "odd prices"

For example, £19.99 is perceived by customers as lower than it actually is. They think that they are closer to paying £9, instead of £10. It could make the sale because they may think £10 is too much but 1% lower is okay.

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3.

It can be used in a sweet shop as customers believe they are paying £1.99 (thinking it is dramatically less than £2.)

4.

Advantages- it makes the sale as customers make buy something when they believe its good "value".

5.

Disadvantages- it can be complicated when calculating costs because some customers check their receipts and its hard to add numbers which aren't whole. Also, it doesn't work on everyone.

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