AN-NAJAH NATIONAL UNIVERSITY

Marketing
12218798
Psychological pricing
By RAJAA SAWAFTA
TO DR.YUSEF
 Psychological pricing

In the corporate world, psychological pricing is the practice of setting prices lower than a
round figure. It has its own nomenclature. The purpose of lowering the leftmost number is to
deceive customers into believing that the product is significantly less expensive after reading
the marginally decreased figure. A good example of psychological pricing is when a $3.99
item is priced at $3 rather than $4, making the product look much less expensive than $4.00.

This is the definition of psychological pricing, sometimes referred to as charm pricing.

Psychological pricing strategies are also employed to influence buyers to pay more or buy
more products in greater quantities.

Strategies of Psychological Pricing

Buy One and Get One Free -Prestige Pricing Strategy-Artificial Time
Constraints Benefits

Draws More Attention to Specific Products: Sales are irresistible to

everybody. It's nearly hard to resist a product when a customer sees a
sign advertising a discounted price in large red letters. This amplifies
the attention that these items are receiving, so use caution in
selecting the things that you want to see increased sales of. A simple
price reduction of $50 to $49.97 can have a significant impact on how
much a customer believes a product is worth.