Pricing Strategy 4 (Pricing based on consumer mind)


N's spirit Basic MBA > Pricing Strategy 4 (Pricing based on consumer mind)

Pricing Strategy 4 (Pricing based on consumer mind)

There are three types of typical pricing based on consumer mind as below.


Odd Pricing

Odd Pricing is to make customers feel a product is relatively cheap. For example, 4,999 USD, 4,980 USD are often used for product at 5,000 USD because customers often regard them as lower price than 1 USD or 20 USD. Odd pricing is usually used for food, daily commodity or service.

Demand curve in case of a product that Odd Pricing can be applied to
Odd Pricing


Prestige Pricing

Prestige Pricing is to make customers feel higher status when they but a product. If the price of a luxury product is lower than customers feel, they regard it as fake or low quality product. On the contrary, higher price makes customers satisfied with trustworthy of the product and their status.

Prestige Pricing is also often used in service industry. For example, English school usually offer relatively high price to customers because they doubt quality of the school if the price is lower than they think. In addition to this, high price makes customers confident.

Demand curve in case of a product that Prestige Pricing can be applied to

Prestige Pricing


Traditional Price

Traditional Price is a price constantly and continually kept for a long term. Once traditional price is formed, sales volume significantly decreases at any price more than it, and on the contrary, sales volume is almost stable at any price less than it.

There are price of beverage and price of bread as its examples. In Japan, price of beverage is 120-150 JPY. If price become more than it, sales volume would drop sharply and if price become less than it, the company would just only lose money.

Demand curve in case of a product that Traditional Pricing can be applied to

Traditional Pricing


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Marketing
Marketing Process
Segmentation
Positioning
Marketing Mix (4P)
Product Strategy
Pricing Strategy 1
Pricing Strategy 2
Pricing Strategy 3
Pricing Strategy 4
Price Strategy for Service
Innovation of Pricing Model
Channel Strategy
Promotion Strategy
Prevention of Competitor's Imitation
Brand Strategy
B2B Marketing 1
B2B Marketing 2
Estimation of Market Size
Estimation of Market Size (ATAR model)
Estimation of Market Size (Logistic curve)
Estimation of Market Size(BASS model)
Stage Gate System


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N's spirit Basic MBA > Pricing Strategy 4 (Pricing based on consumer mind)

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