Free

Pricing and the Psychology of Consumption - Case Study Example

Comments (0) Cite this document
Summary
The paper 'Pricing and the Psychology of Consumption' presents the three pricing strategies that are discussed in this essay are skimming pricing strategy, penetration pricing strategy, and psychological pricing strategy. In this type of pricing strategy, high prices are set for products…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.7% of users find it useful
Pricing and the Psychology of Consumption
Read TextPreview

Extract of sample "Pricing and the Psychology of Consumption"

Penetration pricing is used when the objective of the organization is to increase the market share of the product. It is also used by the organization when the marketing objective is to increase the volume of sales for the product.
Psychological Pricing Strategy
In this type of pricing strategy, prices are designed in an attractive way so that customers have a positive impact on the price of the product. The psychological impact is that customers assume that the prices are at the lower side (Gourville and Dilip, 93). For example, products may be priced $2.95 rather than $3.
Psychological pricing can be used for everyday products as the customer has a greater use of everyday products and they would prefer to buy them on relatively cheap prices. On luxury products, customers may automatically round off the prices and hence psychological pricing may have no impact in such a case. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Pricing and the Psychology of Consumption Case Study - 1, n.d.)
Pricing and the Psychology of Consumption Case Study - 1. Retrieved from https://studentshare.org/human-resources/1597786-markiting
(Pricing and the Psychology of Consumption Case Study - 1)
Pricing and the Psychology of Consumption Case Study - 1. https://studentshare.org/human-resources/1597786-markiting.
“Pricing and the Psychology of Consumption Case Study - 1”, n.d. https://studentshare.org/human-resources/1597786-markiting.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Pricing and the Psychology of Consumption

Pricing

...policy on the basis of age since market surveys indicate that demand on mobile phone largely varies in accordance with age. Nowadays mobile phones have become an inseparable aspect of social life, and hence they have high market demand too. However, demand for luxury models is extremely sensitive to price. Therefore, it is advisable for the company to set moderately low prices for its luxury models. In contrast, high class customers consider luxury handsets as status products and they normally do not buy such products unless company sets a higher price for them. Therefore, it is advisable for Aslan to identify such market segments and practice a premium pricing through...
5 Pages(1250 words)Essay

Pricing

...the product and the feeling they may develop over the new products and the set prices (Smith 68). This psychological aspect in price setting may help in developing a notion of how the customers would react to certain prices. Internal and external reference prices would apply in this case. Odd prices will be considered as the customers would most likely perceive the prices to be low. The number 9 at the end is the trick to be applied in this case when pricing. Zone pricing would apply considering the cost of shipping. The product would cost much more for consumers who are located far away...
4 Pages(1000 words)Essay

Sunk Costs and Organizational Decision Making

...John & Soman Dilip. (September 2009). Pricing and the Psychology of Consumption. Harvard Business Review, pp 92-93. Hirschhausen Christian Von, Beckers Thorsten and Mitusch Kay. (2004). Trends in Infrastructure Regulation and Financing. International Experience and Case Studies from Germany. New York: Edward Elgar Publishing. Jones, Trefor. (2004). Business Economics and Managerial Decision Making. New York: Wiley and Sons. Khushalani Vishal. (2007,November 5). Decision Making Traps : The Sunk Costs Traps. Retrieved February 18 ,2011 from ://http://thinking.bigskyassociates.com/2007/11/decision-making-traps-part-3-sunk-cost.html Nevado , Pedro Picaluga. (2003). Persistence of Irrational...
7 Pages(1750 words)Research Paper

Pricing

...Pricing When pricing a product, many factors need to be put into consideration. Largely, the entire perception regarding the company’s business mostly revolve around the first price. Value adding techniques are better used while determining the price to charge on a particular product than opting for deep discounts. Pricing is even more important when introducing cutting edge technology or products. This paper discusses the most appropriate pricing option available for Whirlpool. As the product manager for Whirlpool’s line of washing machines, skimming would be the best pricing method to choose when...
3 Pages(750 words)Research Paper

Consumption

...Lecturer’s Consumption Introduction Consumption refers to the process of using final goods to disposal. This essay will discuss in details, the reason as to why there is a difference in the way individuals consume. In the contemporary society, individuals live in different conditions meaning all of them are not in the same level. This therefore, gives a clear impression that the ways of consumerism differs from one individual to the next. There are various factors that influence the way in which an individual controls consumerism. In the whole world, every nation is different especially because of the administration. Every nation has a leader of its own who makes sure that all the citizens live as...
4 Pages(1000 words)Essay

Consumption

...heavily should a marketer rely on market research findings What other important factors should be taken into account A marketer should put a lot of decision on his market research findings because this is what lets him know if his product is good or not. It's his or her window to world in a way, it lets them know whether their product is marketable weather it should be a certain price and who exactly is buying their products so they know how to market it. Every now and again you have a company that will take a long shot chance and sometimes they do good and sometimes they do horrible but the companies that use the research findings are most protected it's their umbrella in the customer rain storm. The other factors...
2 Pages(500 words)Essay

Pricing

...Pricing Table of Contents Importance of Pricing 3 Factors influencing price 4 Distribution 7 References 8 Bibliography 10 Importance of Pricing According to John Andrew Davis, “price is the monetary value associated with the product and it is the driver of company revenues.” (Davis, 2009). Charles W. Lamb, Joseph F. Hair and Carl McDaniel believe that price is something “which is given up in an exchange to acquire a good or service.” (Lamb, Hair, & McDaniel, 2007). Price of a product or service is very important to both seller and customer. Usually customers see price as the cost of product or service,...
5 Pages(1250 words)Research Paper

Pricing

...in a function of vital areas the company like markets such as manufactured goods sourcing or selling support. Each MBU is industrial in nature, and can rapidly adjust to change occurring in the market and tries to identify potential expansion opportunities. Bata's potency is present in the universal presence. Whilst local branches are independent, every one benefits from its relation to the global organization for back-office systems, improvement of products and source. The Bata Shoe Company’s pricing is a very interesting way of pricing, they follow the psychological pricing strategy, where they give the feeling of the prestigious product and the same time the feeling...
6 Pages(1500 words)Research Paper

Consumption

...and figurines. The same stores have windows showing intricate cases of serious consumption that do not just send what clothing is, but what the clothing represents as well. Smart and sharp-eyed teenagers walking around ordinary shopping centers develop a skill with the language of products on display and sale (Flanders 105). Moving from display to display and watching the behavior of other shoppers, teenagers learn an entire new tradition exists in shopping centers. For instance, store windows apply “downshift factors” of sarcasm and irony, approaches of reverse psychology, and reference. Shopping centers offer models of stylish, economical, flamboyant, and straightforward expression (Gladwell 1996)....
5 Pages(1250 words)Essay

Consumption Today vs. Consumption Tomorrow

...Teacher Consumption Today vs. Consumption Tomorrow In the film “A Knight’s Tale”, William asked the five florins share of his friends as a capital to embark on his project to compete in the tournament in Rouen. He convinced his friends to give up their share for the prospect of a better future that “In one month we could be on our way to glory and riches none of us ever dreamed of”. But for them to have the possibility of realizing that, they have to give up what the five florins could have bought which are “Eel pie. Brie tarts. Tansy cakes with peppermint cream.” Following the principle of PPC for analysis, it meant transferring their resources to purchase one good to another which in this case,...
1 Pages(250 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Case Study on topic Pricing and the Psychology of Consumption for FREE!

Contact Us