Consumers buy things according to their purchasing power and their preferences. There are various pricing techniques which sellers use to maximize consumer utility and to gain as much profit as possible. Talking about The psychological pricing techniques used by sellers, These strategies make the price more attractive and the strategy is not to lower the prices but is related to the emotions of the consumers. Various psychological pricing strategies are odd even pricing, prestige pricing, multiple pricing, bundle pricing and promotional pricing. A lot of retail stores use these kinds of pricing strategies as they provide a platform to emotional consumers rather than rational consumers. Research on consumer behavior suggests that many consumers buy products on the basis of their emotional decisions. Psychological Pricing is a play on the perception of the consumer. It creates a reputation in the minds of the consumers of its perceived value.
Pricing Strategies:
Odd Even Pricing: It is also called charm pricing or nine end pricing. According to
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The consumers usually choose that bundle which maximizes his satisfaction / utility. Every customer has a price that he is willing to pay for a particular good or service. If the price is equal to or lower than what the customer is willing to pay, the customer will buy, as he considers the price a bargain. The difference between what the customer pays and what the customer was willing to pay is known in economics as the consumer surplus. Bundle pricing is an attempt to capture more of your customers' consumer surplus. It is also identified that such pricing is prevalent in software industry and the profitability could be increased from 10 to 40 %. Such pricing also help monopoly competition block their competitor by combining products or services or both of