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Psychological Pricing


This type of pricing uses psychological tactics to give the impression that the price of a product/service is lower then it actually is. Firms will not charge a whole number for their product but opt to choose slightly less then a whole number in order for the product to seem much cheaper than it is . For example a firm may charge $14.99 instead of $15.00

Psychological Pricing
The psychological pricing diagram above shows examples of different psychological pricing strategies..

Psychological Pricing Theory

Psychological pricing is based on the theory that consumers want to pay as little as possible for a product. So it attempts to create pricing strategy which attempts to create a perception in the consumers mind that they have paid a lot less for a product than they actually have.

Benefits of psychological Pricing

Psychological Pricing Disadvantages


Psychological pricing helps an organisation develop a certain image and positioning strategy for the company. Psychological pricing has many advantages. A firm that uses psychological pricing, will probably use it in conjunction with other pricing strategies.


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