The price has a psychological value. Buyers will buy a high-priced product because they believe that a high price is a good indicator of value. Their perception is not based on reality, it is based on psychological justification, therefore, the behavior of the buyer is influenced more than material and price material values.
Interestingly, since buyers do more research on product attributes or a business improves product characteristics more efficiently, product knowledge (“acquaintance breeds contempt”) allows buyers to make a more rational, psychological, purchasing solution and for buyers price movements down the scale of values.
One use of psychological pricing is in pricing. Buyers believe that prices ending in uneven rather than even numbers (for example, $ 9.99, $ 199,999, etc.) are a better deal or a better price than even numbers (for example, $ 10 or 200,000) . If the prices of goods must be in the price range (for example, in online auctions or in cars or other sales lists), if the listing price is in an odd range, say $ 199,000, it will be displayed in a lower price range than the listing at 200,000 US dollars, and will be considered as the best value. The objective of this strategy is that products ending in an odd number are also often perceived as lower in cost. Make sure that you choose the right price and the right strategy for your particular product or service.
Another use of psychological pricing is the reference price. Background pricing is that buyers experience a psychological response to a price that reflects how they relate to the ratio of price to a particular product. A business can use base prices and position its product among valuable goods or luxury goods to imply that its product belongs to the same category. Be careful with this positioning strategy; it can backfire if buyers feel that your product really does not belong to this category.
In order for psychological pricing to be an effective pricing strategy, a product must have some characteristics that will attract an ego-sensitive buyer. For example, luxury items are attractive to ego-sensitive buyers. Excellent leisure products, such as boats, are attractive to ego-sensitive buyers. Your strategic planning model must ensure that the pricing strategy chosen for your product or service is the best price.
Make sure your pricing strategy matches your product and your market by checking the price before releasing this price on the entire target market. Also consider the impact of other elements of the marketing mix on your price: a product suitable for a psychological pricing strategy is an advertising program in accordance with a pricing strategy and is a place or distribution channel in balance with price (i.e. product delivery should cost more than the product itself)?
