Question

Companies selling luxury products price them at amounts such as $30, $50, and $100, while those selling bargain items may price items at $29.99, 13.99 and 19.99. What psychological pricing strategy is being used?

Answer 1

The psychological pricing strategy being used in this scenario is known as the charm pricing strategy. This strategy involves pricing products just below a round number, typically ending in .99 or .95, to make the price appear lower and more attractive to customers.