Psychological Pricing

Psychological Pricing is a marketing exercise where in prices are set to a level that is perceived attractive by customers. It is a marketing practice to show that there are certain purchases, which are done on the emotional grounds.

Now a days , almost all companies do psychological pricing such as BATA floaters @299, Mumbai-Delhi King Fisher flight @4099 INR etc. This pricing strategy targets the psyche of the customers, where in they look for the prices lower than the market price or customers in the end feel that they got the best available deal in the market.

There is a scientific reason behind this pricing. When customer looks the price as 100, he perceives is as higher compared to 99.95 because human minds rounds it off to 99 and thus goes for buying it. Another customer survey showed that customer feels happy when she received back some change after paying for the product.

There are few types of Psychologocal pricing, such as Comparison Pricing or reference pricing where in seller provides the reference of actual pricing and then discounted pricing. This technique is followed mostly in mega marts like Big-Bazar.

Prestige Pricing in which marketers charge high prices to show that the products belong to high quality and have cult status like AXE deo.

Odd-Even Pricing where in prices are rounded off to 49 or 99, the theory says that customers feel that it is well marketed product while in case of 100 rupees, customer will feel that marketers have well calculate his profit.

Percentage Discount pricing where in different levels of percentages are shown on the racks to show that company has reduced pricing. This technique is followed by companies like Cantabil, Koutons which increase the price and then sell at 50% + 49% discount, customer feels that he is getting 99% discount wherein he is getting discount closer to 75%.

So there are lot of ways to target the psyche of the customers and in this competitive scenario, marketers use such methods to increase their sales.