The Psychology of Price: How to use price to increase demand, profit and customer satisfaction

People will compare the price of your product to the range of prices for comparable options.

make sure that you differentiate your product or service from low-cost competitors, and anchor its value to that of a more expensive category.

some consumers will pay up to 50% more for a product if they can pay for it later

Note the ratios in price: approximately 12:20:60 or 3:5:15. The numbers do not need to match these proportions exactly – a 1:2:4 ratio is also common

when seen against the price of their more expensive product, the quality attributes will become relatively important and your price less so. This leaves you in a stronger negotiating position to maintain your margin:

If you sell by mail order, you may find it worthwhile to offer customers your product on a sale-or-return basis.

the primary anchor, the A package, is significantly higher than your standard price; and that you still offer people at least two options even if the A package is too expensive for them. The C package is lower than the B package, but not too much lower. The overall effect of this structure is to set the expectation that some people are willing to p

psychological goal is to piggyback on existing demand

first create these impressions by leveraging customers’ knowledge of existing categories, and then sustain them by being consistent each time they encounter you.