Definition of Psychological Pricing
A pricing strategy that comes from the idea that specific prices influence consumer psychologically.
Description of Psychological Pricing
It’s one of the causes of a price point, which is the price where demand for a specific item will remain high. Get shoppers to think with their emotions rather than with their brain. A few types of psychological pricing include, but aren’t limited to odd-pricing, prestige-pricing, and BYGOF pricing.
Advantages of Psychological Pricing
Make more sales with more appealing prices, that give a false sense of a lower price. It’s also a great way to beat out your competition solely by a couple of cents.
Disadvantages of Psychological Pricing
If you don’t have a quality product, this strategy won’t help you in any way, shape or form. Also, thanks to the internet, consumers are more aware of this method and are instead comparing the features in items rather than their price.