Batch: PGDM II (2019-21)

Subject: Marketing Management

VIVEK KUMAR PATHAK

PGDM 2

SEC B

Topic and Unit: PRICING

Quote atleast 1 example of each of the 10 pricing strategies discussed

1. Similarity Can Cost You Sales

In one experiment where researchers had users choose to buy (or pass and
keep the money) two different packs of gum, only 46 percent made a
purchase when both packs were priced at 63 cents.

2. Utilize Price Anchoring

A common cognitive bias called anchoring is the culprit here. Anchoring
refers to the human tendency to rely too heavily on the first piece of
information offered when making decisions.

By placing premium products and services near standard options you can
create a clear sense of value for potential customers, who will then view your
less expensive options as a bargain in comparison.

3. The Secrets of Weber’s Law

It’s important to note that many variables can have an effect on pricing.
These include foundational elements like supply and demand as well as
constructed elements such as your business’ authority, reputation and ability
to inspire brand loyalty.

4. Reduce Pain Points in the Sales Process

Here are a few of our favorite methods:

1. Reframe the product’s value. 

2. Bundle commonly bought items
3. Sweat the small stuff. 
4. Appeal to utility or pleasure. 

5. Try Out an Old Classic

In comparing the prices $35 versus $39 for women’s clothing, the study
found that the prices ending in 9 were able to outperform the lower prices on
average by over 24 percent.

Was $60, now only $45!

Was $60, now only $49!

6. Emphasize Time Spent vs. Saved

Many purchases tend to fall in either the “experiential” or “material”
categories. Business owners should adjust their message accordingly.
Purchases like concert tickets benefit more from the “time spent” messaging,
whereas expensive designer jeans are aided by the reminders of money and
prestige.

7. Never Compare Prices Without a Reason

example of a brand that does give a good reason to make a price comparison
is insurance. They explain why cheap insurance isn’t always the answer and
give customers plenty of insightful information on how they lower prices the
right way—by eliminating needless expenses through their online-only
approach.

8. Utilize the Power of Context

This is why people will pay more for a “multimedia course” over an eBook,
even if the information offered is exactly the same. You need to provide
potential customers with subtle cues (creating company authority with smart
copy and social proof ) that justify your premium prices, because perception
goes a long way toward influencing their evaluation of your prices.
9. Test Different Levels of Pricing

Test #1

Four out of five people chose the more popular premium option. But could
adding a third item and price point increase revenue by targeting those
looking for a cheaper option? The researchers tested this by adding a $1.60
beer to the menu.

Test #2

10. Keep Prices Stupidly Simple

When these pricing structures were shown to subjects:

 $1,499.00
 $1,499
 $1499