Psychological Pricing Examples
- Pricing at $1.99 instead of $2
- Price bundling for percieved savings
Psychological pricing integrates sales tactics with price. Let’s say we’re pricing a candy bar. Utilizing a value based pricing strategy, we’ve determined that chocolate should be priced between $1.85 and $2.15. If we were to utilize psychological pricing on this item, we would be more likely to price the candy bar at $1.99 than $2.00 because of the subconscious “99 effect”, which takes advantage of the fact that our customers read from left to right and see the number 1 first, therefore subconsciously believing they’ve received a deal.
The same methods can be used to create the opposite effect and make someone feel as if they are investing in a luxury or quality item. Artificially inflating the margins on luxury goods could potentially associate a social status with them.