Pricing Theory

Pricing Theory

While most of us are probably at least passingly familiar with the idea that marketers use pricing tricks to make different products seem appealing in different ways, the extent to which these manipulations are deployed (and their surprising degree of effectiveness) may not be as obvious.

This is a different concept, I should note, from the economic concept “Theory of Price,” which is related to macro-scale issues like supply and demand.

A marketer’s pricing theory is more like, “If I want someone to buy the $8 option, I should make sure there’s a $4 and a $12 option, as well—because most people, lacking lots of knowledge about the product in question, will opt for the middle-price choice.”

Here’s a quick (and visual) summary of some of these concepts (which are worth keeping in mind to avoid making purchases that are not ideal for your needs, and to decide whether to keep shopping at places that leverage a lot of them against you): https://www.boredpanda.com/pricing-theory-products-simplified/

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