article 5: how to stop customers from fixating on price Flashcards
1
Q
4 pricing moves to diminish salience of price
A
Strategy 1 - Use price structure to clarify your advantage
Strategy 2 - Wilfully overprice to stimulate curiosity
Strategy 3 - Partition prices to highlight overlooked benefits
Strategy 4 - Equalize price points to crystallize personal relevance
2
Q
Strategy 1- Use price structure to clarify your advantage
A
- Instead of charging a price based on the units that you are expected to sell, the price should be based on the value that the product delivers to the customer. Customers will recess the performance of the product based on the price.
- A pricing change compelled customers to pay attention to a certain form of value. The key to succeeding with this strategy is to vary price according to what’s most distinctive about your offering rather than the makeup of the product itself.
3
Q
Strategy 2- Wilfully overprice to stimulate curiosity
A
- Ask a premium price, set pricing higher than what customers normally intend to pay.
- The customer is motivated to take a closer look at the product and pay attention to see
which features justify that price. - A price premium between 50-80%, causes customers to increase the recall of label
information, a higher sense of personal relevance, and produces the greatest willingness to pay.
4
Q
Strategy 3- Partition prices to highlight overlooked benefits
A
- Price partitioning= break a price into its component charges, to highlight dimensions of differentiation that might otherwise go unnoticed.
- This strategy succeeds only when it primes customers to see a real benefit they would otherwise have overlooked.
5
Q
Strategy 4- Equalize price points to crystallize personal relevance
A
- Present the customer several options at the same price, so that they can discover which option best suits their needs.
- This in turn, causes consumers to think about their desire for the product in general, instead of reinforcing their fixation on saving as much as possible.
