Using The Psychology of Price, you can discover why price is a psychological issue - and how to make the most of that knowledge.
A practical, jargon-free workbook, The Psychology of Price demystifies a critical aspect of running a business, lucidly and logically explaining the science behind pricing so that you can generate more demand, more profit and more customer value today. Inside The Psychology of Price, you can learn: -How to get people to expect to pay more -How presenting products that nobody wants can influence what customers are willing to pay -How upselling by low-cost add-ons can increase sales and perceived value Crucially, The Psychology of Price will help you find out how good your pricing really is and give you the toolkit to ensure you charge the right price point for your product or service.
What have you got to lose? Is your product sitting in a shop alongside other similar products? Find where in that path you can add a new product at a high price.
If you are a retailer or if you sell products from your own website, you have a lot of control over this. But you can still try to persuade the retailer to display a higher-priced, luxury version of your product alongside the standard one show them this chapter if you like — it is in their interest too! Choose your anchor price to be substantially higher than your standard price.
If two prices are close together, customers are likely to compare them directly instead of changing their subconscious evaluation of the true value of the product. If possible, try to measure consumer behaviour with and without the anchor. Measurement is really important as there are lots of effects which may be going on at the same time, and you want to know which ones are stronger. T he Psychology of Price: How to use price to increase demand, profit and customer satisfaction, published by Crimson Publishing is available on Amazon now. Your email address will not be published. Business advice from is4profit Pricing strategies: How you can shape a customer's perception of your product.
Leigh Caldwell May 23, By Leigh Caldwell.
Leave a Reply Cancel Reply Your email address will not be published. Newsletter Signup. The likelihood of trial, 3. The likelihood of purchase at given price points, or 4. The overall acceptability of a series of price points can be measured. These pricing measures would be repeated for multiple price points, thereby allowing the researcher to pinpoint the optimal price for a given product.
Multiple price points or pricing questions must be used. Respondents were presented with all possible brand combinations and would indicate how much they were willing to pay for one brand over another. Many different ways to include premium measures into the pricing scale exist and can be implemented for specific pricing studies.
Respondents are asked to report:. The price at which the product is so cheap that the respondent would question its quality. The price at which the product is inexpensive, but not so inexpensive that the respondent would question its quality. The price at which the product is expensive, but not so expensive that the respondent would consider it.
The price at which the product is so expensive that the respondent would not consider it.
Pricing in the professions - books for lawyers accountants surveyors | Kim Tasso
The price measurements in each of the respective categories provide a distribution of perceptions about the acceptable price of the product. The analysis of these distributions will help answer such questions as what is the average expected price; at what price would we expect purchase intention to drop sharply; and at what point is the price too inexpensive to imbue a quality image? Economists express these concepts in terms of price elasticity of demand. The key to an effective Van Westendorp study is to create a price scale so that lower is not always better and so that users of a product are differentiated from non-users of the product.
Furthermore, the price—value of the product must be measured so that an accurate view of price perceptions and propensity to buy are included.
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Validation measures for pricing questionnaires are always essential. For example, prices may vary by distribution location i. The use of graphics in the form of pictures of the store and product provide a window into the world that assures more realistic and accurate price elasticity estimates. Tracking the effects of pricing on market share over an extended period of time gives a unique view of price-demand relationships.
Monthly or quarterly measures show changes that result from marketing programs, competitive action, or general market demand. These trend analysis studies estimate price-demand relationships and can show the interaction between price and brand sales if market measures of price changes are included. By way of contrast, the Van Westendorp method, conjoint analysis, and discrete choice conjoint analysis may be modeled to include the influence of broader price ranges on the brand and can be accomplished in much shorter time periods.
- 2. Round Number pricing.
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For example, a conjoint analysis product profile might be composed of five attributes. Using express mail services as an example, each service is composed of a set of attributes like company name, delivery options, price and drop-off location options. For each attribute, there are levels that can be identified.