14min
Defining the price of an object has a multitude of effects. Often, it ends up having a big influence on the customers’ decision to buy. This book analyses some of the most effective tricks of the trade that can be applied and explains the psychological bonds that are automatically created between the buyer and the product simply by means of the price: information that can be precious to entrepreneurs, marketers and sales managers.
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Analysis and key concepts
01.
The price is a fundamental part of the profit, but it is very delicate because it is the company’s interface with the client
02.
Parameters, process, prediction and profit: the four "P's" that allow you to establish the price using logic
03.
How to create an attractive price: “odd pricing”
04.
Sales: how to calculate the most attractive price drop
05.
The median: knowing which price range to place a product in
06.
Limits stimulate spending: the power of restriction
07.
Features to evaluate the price: each consumer has their own “reference scale”
08.
Luxury goods and the power of details: the importance of words and colours
09.
The payment method and “the pain of paying”
10.
Quotes
11.
Take-home message
In the business world, the objective is to make a profit. Each entrepreneur pursues their own income, juggling a series of variables: the fixed costs of production, the additional costs, the units sold and the set price.
In a 1992 study, Michael V. Marn and Robert L. Rosiello calculated that a 1% improvement in spending, or an increase in sales - again by 1% - would guarantee a higher profit, but a price increase of the same small percentage would offer an even greater reward.
So we can surmise that price is a fundamental factor, but it must be treated with great care, because it represents a direct interface with customers: how might they react if it changes?
According to the neoclassical theory, the more the price increases, the less a person will be interested in buying an item. In reality, the behaviour of individuals can be influenced by many other stimuli.
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The author
Markus Husemann-Kopetzky, a successful author, renowned academic, and consultant, works as a research associate at the University of Paderborn in Germany, where he graduated with a doctorate in Behavioural Microeconomics. In 2018, he published the Handbook on the Psychology of Pricing which captivated the international business community before becoming a best seller for entrepreneurs and marketers.
Edition
Publishing house:
Pricing School Press
Year:
2018
Pages:
191
ISBN:
978-3947897001