Arriving at a price for your product is a science. You might decide to price your product below your competition or above your competitions’. For example, you might decide to price a tablet computer lower than your competition i.e. USD 130.00. If your product is unique you might decide to mark it around what consumers are willing to pay for an alternate service.
However when it comes to putting down the actual numbers; it is a science that can influence our purchasing instincts. Hence, the actual DISPLAY price of Tablet could be USD 129.95. Let me share FOUR tactics used by traders on DISPLAY prices and how it impacts us subconsciously.
- Tactic # 1: USD 127.83 – Such price structure wherein the second half is in odd numbers sends a message that the vendor has really squeezed on pricing to give consumers the best offer. The lesson? Don’t be fooled.
- Tactic # 2: USD 44.00 v/s USD 49.00 In an experiment done Shoes A were priced USD 44.00 in catalog # 1 and in catalog # 2 the same shoes were priced at USD 49.00 and shipped to two different groups of people. Surprisingly the USD 49.00 marked shoes sold more than USD 44.00. Why? Because when we do mental math (psychological analysis) 44.00 is 4.00 (10%) more than 40.00 whereas 49.00 is 1.00 less than 50.00. Hence be forewarned, pay attention.
- Tactic # 3: Nowadays supermarkets announce special weekly pricing for few products that have a point of comparison to attract extra foot fall. When a consumer walks in, the specially priced items have high visibility and create a general opinion that if these items are so low priced then the other items should be too, so let’s purchase the other items as well from this supermarket. Or, why spend time driving to another place for a few items? Let us complete our shopping list in this supermarket.
- Tactic # 4: If your product has no reference value; you can mark it higher for profit and place it next to a common item which is much below the market price. Such as a bottle of water. When consumer walks in the low price marked water bottle has high visibility and it creates a general opinion that if this item is so low priced then the unique item should be too, so let’s purchase it.
Good luck on your next visit to the hypermarket.