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Pricing and the Psychology of Consumption - Case Study Example

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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…
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Pricing and the Psychology of Consumption
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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
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