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The Psychology of Pricing
from:Marketing, on the Internet or otherwise, is a psychological business. In the retail marketing sector, there are companies that study what colors consumers respond to and which music consumers will most likely positively respond to. They study everything about us and turn it into profits when we respond to their advertisements and buy their products. Companies that make television commercials employ a good bit of psychology in order to produce commercials that we will respond to.
Should You Charge $9.99 or $10?
Price, too, is often psychologically motivated. Even though there is only a one cent difference between $9.99 and $10, most Internet marketers and brick and mortar retailers will opt for the $9.99 price every time. Why is that? Simply put, because it looks more attractive and sounds cheaper to consumers. Many of us will see a $9.99 price tag and immediately fix $9.00 in our minds while some of us will immediately jump to the $10 price tag. Case in point: My favorite pizzeria has a special every Monday night. They offer a large, one-topping pizza for just $7. At least, that’s what I’ve been telling myself for months, even though I knew the real price. After going for several weeks without ordering the Monday night special, when I called to place my order last week, I asked if they still have their Monday night $7 special. The employee on the other end of the phone assured me that they did, only the price was $7.99.
As I said, I knew months ago, the price of the pizza was really $7.99 but that didn’t stop me from thinking Hey, it’s Monday night, think I’ll have the $7 pizza for supper. I’m embarrassed to admit I am a classic example of why marketers lose a penny a sale in order to gain more sales, and thus increase their profits substantially. Realize the power of smart pricing when you set your own prices and watch your profits grow!
Is it on Sale?
When Circuit City went out of business in February 2009, I didn’t want to miss the opportunity to buy something on sale so I visited the location in my city. To my dismay, the first round of price cuts, 25% off, didn’t seem to reflect a sale at all. Even with a 25% reduction in price, I could tell many of the items were still cheaper at other stores. Still, items flew off the shelves and continued to do so until the shelves were empty. A couple of days after my first visit to the now defunct retailer, I happened to catch a news broadcast where Circuit City executives admitted they had hiked their prices to MSRP (Manufacturer Suggested Retail Price) and then shaved off the sales percentage.
Call it a sale and some people will buy anything, regardless of the price. Be careful, though, because if you don’t really shave your prices and say you’re having a sale, it may backfire when savvy consumers catch on.
Pricing Cars Specific links
Pricing Cars News
Fuel hike may make petrol cars cheaper - Times of India
 Daily Mail | Fuel hike may make petrol cars cheaper Times of India The steep Rs 7.50-hike in petrol price is set to further fuel the demand for diesel models as the fuel's lower running cost and steady pricing will add to its attraction. While sentiment in the car market remains weak - hit by inflation, ... Carmakers like Hyundai and Maruti Suzuki fast-track diesel vehicle plans after ... SIAM: Petrol price hike to have -ve impact on auto sector Spare Us the Doublespeak on the Petrol Price |
We should be pricing cars and bikes higher, not petrol - Firstpost
 Firstpost | We should be pricing cars and bikes higher, not petrol Firstpost Petrol has become a sensitive political commodity not because the aam aadmi has enough money to own cars or two-wheelers, but because a deliberately flawed policy has made it so. Here's a counter-intuitive idea: we should be pricing cars and ... |
May 2012 New Car Sales Expected to Be Highest May Since 2007 According to ... - Sacramento Bee
May 2012 New Car Sales Expected to Be Highest May Since 2007 According to ... Sacramento Bee By TrueCar.com SANTA MONICA, Calif., May 24, 2012 -- /PRNewswire/ -- TrueCar.com, the authority on new car pricing, trends and forecasting, today released its May 2012 sales and incentives forecast. The forecast shows the following: Used car sales* are ... |
Honda Announces Pricing On Sleek New Civic Hatch - Autochannel (press release)
 Autochannel (press release) | Honda Announces Pricing On Sleek New Civic Hatch Autochannel (press release) The Honda Civic Hatch is one of the most stylish cars in its segment, with a sleek, sporty design and sophisticated touches like the rear brake-light cluster. It prioritises safety and functionality with a five-star ANCAP safety rating and clever ... |
Future electric car roundup: Our most anticipated EVs of 2012 and beyond - Digitaltrends.com
 Digitaltrends.com | Future electric car roundup: Our most anticipated EVs of 2012 and beyond Digitaltrends.com The Infiniti LE is expected to go into production in 2014, with no firm pricing or availability details available at this time. One of the electric cars on the horizon we're most excited about is Tesla Motor's stylish Model X. Virtually everything ... |