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Manipulating Pricing To Increase Sales: Is the use of discounts ethical? Do they work?

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Some retailers, instead of just pricing something at $100 and charging that price, will set a retail price of $200 and then offer a 50% discount. This might make consumers think they are getting a bargain, even though the final price is $100 either way. Do you think this works? Do you think this is ethical? Explain.

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Solution Summary

This solution discusses the tactic some retailers use: setting a retail price of $200 and then offer a 50% discount, instead of just selling it for $100. It addresses if this tactic works, and if it is ethical. It includes examples. This solution is 220 words.

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The idea of marking something down, rather than just stating the lowest price possible, is a psychological tool used to manipulate the customer into wanting to purchase the product soon in order to secure the lower price. It serves as a call to action to incentivize and encourage the consumer to purchase product. It is a method ...

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Sally Baldwin, Ed.D
Education
  • BA, University of Southern California
  • MSS, United States Sports Academy
  • Ed.D, Boise State University
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