Psychological Pricing
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Cite a local example of psychological pricing and evaluate whether it makes sense.
How does prestige pricing fit into the marketing mix? Would exclusive distribution be necessary?
Distinguish between sales analysis and performance analysis.
Carefully explain what the iceberg principle should mean to the marketing manager.
Please provide detailed answers!
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Solution Summary
This posting gives you a step-by-step explanation of Psychological Pricing. The response also contains the sources used.
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Step 1
An example of local psychological pricing is by Queen of Cakes in Minnesota. This local retail firm charges premium prices for Custom Decorated cakes. It also sells unique 3-D and Cut-Out Cakes. The pricing is on the higher side. The pricing does not appear to be related to the cost of cakes. The charging of high prices makes sense because it creates an impression that the cakes are really special.
Step 2
Prestige pricing is part of 'Pricing' in the marketing mix. Price is a variable that can be changed by the marketer and the high ...
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