There are many pejorative terms for television, including “boob tube” and “chewing gum for the mind”, showing the disdain held by many people for this medium. According to a study published in 2008, conducted by John Robinson and Steven Martin from the University of Maryland, people who are not satisfied with their lives spend 30% more time watching TV than satisfied people do. Based on his study, Robinson commented that the pleasurable effects of television may be likened to an addictive activity, producing “momentary pleasure but long-term misery and regret.” — Wikipedia
“For many years researchers have investigated customers’ response to product pricing,” notes KnowThis.com in their “Market Pricing: Psychological Method” article. “Some of the results point to several interesting psychological effects price may have on customers’ buying behavior and on their perception of individual
“Odd-even” pricing relates to whole number pricing where customers may perceive a significant difference in product price when pricing is slightly below a whole number value. For example, a product priced at (US) $299.95 may be perceived as offering more value than a product priced at $300.00. This effect can also be used to influence potential customers who receive product information from others. Many times a buyer will pass along the price as being lower than it is either because they recall it being lower than the even number or they want to impress others with their success in obtaining a good value. For instance, in our example a buyer who pays $299.95 may tell a friend they paid “a little more than $200″ for the product when in fact it was much closer to
“Originally, this practice was meant to prevent pilfering of cash by forcing a cashier to open the cash-register (to pay change to the customer) and thus register the transaction,” notes BusinessDictionary.com in their explanation of odd-even
“Another psychological effect, called prestige pricing, points to a strong correlation between perceived product quality and price,” KnowThis.com continues:
The higher the price the more likely customers are to perceive it has being higher quality compared to a lower priced product. (Although there is point at which customers will begin to question the value of the product if the price is too high.) In fact, the less a customer knows about a product the more likely they are to judge the product as being of higher quality based on only knowing the price. Prestige pricing can also work with odd-even pricing as marketers, looking to present an image of high quality, may choose to price products at even levels (e.g., $10 rather than
“Price lining or product line pricing is [another] method that primarily uses price to create the separation between the different models,” further explains KnowThis.com in their “Market Pricing: Price Lining Method” article:
With this approach, even if customers possess little knowledge about a set of products, customers may perceive they are different based on price alone. The key is whether the prices for all products in the group are perceived as representing distinct price points (i.e., enough separation between each). For instance, a marketer may sell a base model, an upgraded model and a deluxe model each at a different price. If the differences in features for each model is not readily apparent to a customer, such as differences that are inside the product and not easily viewed (e.g., difference between laptop computers), then price lining will help the customer recognize that differences do exist as long as the prices are noticeably
1 “Market Pricing: Psychological Method,” KnowThis.com, at http://www.knowthis.com/principles-of-marketing-tutorials/setting-price-part-1/market-pricing-psychological-method/ (retrieved: 14 May 2011).
2 “odd even pricing,” BusinessDictionary.com, at http://www.businessdictionary.com/definition/odd-even-pricing.html (retrieved: 14 May 2011).
3 “Psychological Method,” KnowThis.com.
4 “odd even pricing,” BusinessDictionary.com.
5 “Psychological Method,” KnowThis.com.
6 “Market Pricing: Price Lining Method, KonwThis.com, at http://www.knowthis.com/principles-of-marketing-tutorials/setting-price-part-1/market-pricing-price-lining-method/ (retrieved: 15 May 2011).
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