Psychological pricing involves pricing product or services where by it is more appealing to the emotional side than the rational side. We will take a look at how apple has used this pricing strategy to land a market at high end hardware
Apple has maintained a price range between $1000 to $20000 with every new release there are thousands of customers who will flock to buy their products. This is because the company has always been aggressive with their pricing strategies that include the more expensive a product the better quality and features this psychological phenomenon has helped sell their products worth $1 trillion.
The first strategy includes selling a small number of products unlike other companies. Apple is known to sell phones, laptops, MP3 and watches. Discounts are rarely offered for the products this applies to all the apples stores worldwide.
The second strategy involves pricing a products as a bargain price most apple products will sell at $1199 instead of $1200,this also known as left digit effect where people will read the price left to right, this is to make it seem cheaper and also at a bargain price. The odd pricing helps to make a difference in terms of pricing.
The other pricing strategy is introducing a new product that is similar to the old product but has more features and pricing difference is by $50 to $100, apple products that are slightly more expensive are presumed of high quality e.g. apple laptop of $699 and another apple laptop $799 can have similar features but the more expensive one is seen of more quality.
Psychologically when you pay more you tend to appreciate the product more and think it is of high quality. Apple has used this strategy to take advantage and maximise their product any business that would use this kind of pricing strategy would be as successful as Apple.
https://www.shopify.com.au/blog/26445508-psychological-pricing-is-your-golden-ticket-to-selling-more. Psychological Pricing Is Your Golden Ticket to Selling More.Tucker Schreiber 2015