Identify the psychological effects of pricing.

Identification should include

• psychological pricing techniques
  • prestige pricing
  • odd-even pricing
  • multiple-unit pricing
  • buy one get one (BOGO)
  • everyday low prices (EDLP)
• psychological effects
  • customer perceptions

• product image
• the consumer’s willingness to pay
• loss leader
• special event
• rebates and coupons.

Process/Skill Questions:

• Why would a business want to charge more than a competitor for a similar product?
• Why does psychological pricing work?
• Why is psychological pricing a competitive technique?
• Why would a business want to use a loss leader?
• How does psychological pricing influence the sale of a product/service?