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Ch 12: Psychology of Price

About This Chapter

If you need to study for marketing exams, bring up your grades or improve your consumer behavior knowledge, take a look at this comprehensive chapter on the psychology of price. These mobile-friendly lessons allow you to study wherever you are and whenever you have free time.

Psychology of Price - Chapter Summary

The lessons in this chapter outline the psychological factors that pricing can have on consumers. Each lesson provides relevant illustrative examples to demonstrate the effects of various pricing strategies and consumer perceptions. You'll also see how the placebo effect of price and the endowment effect relate to consumer behavior.

We've included plenty of self-assessment quizzes to help you gauge your comprehension of the material, and each lesson is available 24/7 so you can study whenever it fits your schedule. After studying these lessons, you'll be equipped to:

  • Evaluate pricing strategies that marketing managers use to select the correct price for their products
  • Explain the effects that prices have on consumer and producers
  • Assess consumer perceptions based on the chosen pricing strategy
  • Analyze the placebo effect of price and understand how price increases can boost customer satisfaction
  • Outline consumers' desire for free products and services and indicate how this desire relates to pricing strategy
  • Connect the endowment effect to behavioral economics

6 Lessons in Chapter 12: Psychology of Price
Test your knowledge with a 30-question chapter practice test
Price Selection: How Businesses Select the Correct Price for Products

1. Price Selection: How Businesses Select the Correct Price for Products

Marketing managers need to select the correct price for their product as part of the marketing mix. The three pricing strategies are price skimming, penetration pricing and status quo.

Effects of Prices on Producers and Consumers

2. Effects of Prices on Producers and Consumers

In this lesson, we'll take a look at how prices may affect decision making in producers and consumers. The lesson will also define key terms and concepts related to how pricing affects producers and consumers.

Pricing Strategy and Consumer Perception

3. Pricing Strategy and Consumer Perception

Consumers' perceptions of products rely heavily on the pricing strategy that is chosen by the marketing manager. Price will impact not only consumer perception but also profit and speed of product adoption.

The Placebo Effect of Price: Definition & Analysis

4. The Placebo Effect of Price: Definition & Analysis

So if I pay more, I get more, right? This is the theory behind the placebo effect of price. Most consumers believe that if a product is more expensive, the product must be better. Complete this lesson to learn more about this phenomenon.

Consumer Behavior: The Allure of Free

5. Consumer Behavior: The Allure of Free

It seems counter-intuitive, but offering free things to customers can actually result in sales. In this lesson, we will look at how consumer behavior is influenced by free samples and trial offers.

Endowment Effect: Definition & Example

6. Endowment Effect: Definition & Example

We all love our things. But when it comes to selling them, what do you feel they are worth? In this lesson, we will learn how we value the things we own.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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