The aspect of price psychologist
Written by dogosh on 3/13/2008A price had the psychological factor. This factor emerged because the consumer in the process of their purchase, only did not have a rational attitude but also irrational because of the existence of matters emotional that was involved in the process of the purchase. They relied on the perception and impure used counted-calculation mathematical in comparing the price of one product with the other product. Therefore, the marketer who formulated the price strategy, must also consider the psychological factors.
Many applications where the marketer could make use of this psychological factor. In the world retail for example, there were two matters that often were used as the weapon to compete through the pricing. Retail often used tactics "lost merchandising". There were several deliberate products was made very cheap and when must be unfortunate or his price under cost price. This product was afterwards displayed in front of and was given the big price label. The consumer who entered, immediately will see this price. Retail hoped, since the first time entering in retail this, has been formed by the perception that retail they gave the relatively cheap price.
Many retail especially the supermarket where the customer was the household that was sensitive to the price, to carry out the tactics of the price fitting under the psychological threshold. There was the product that was given by the price 9,995, 49,990 or 99,950. With this price, wanted to be pointed out that their price did not yet penetrate the psychological limit. "Still under 10,000 or under the upper threshold limit of a product".
Price tactics like this must be careful. When so many products were maintained by the price like this, will be formed in the perception of the customer that retail this tried to cheat the customer. In the long term, can damage the image. Therefore, the pricing like this was enough for the several items product then.
The application of the second psychological price was to be connected with currency. especially for this products where the market target was the middle group low. The retail price that was sold by retail, must be striven for did not exceed the certain value of currency. The pricing of a peppermint of 125 were bad. First gave the impression that the price of this product penetrated the currency limit 100. This could give the expensive impression. Secondly, this made both the seller and the buyer were not comfortable in transaction.
So, must be monitored whether the retail price of this product could 100. When usually the shop has the profit 20% of the selling price, then the price of the shop must 80. When to causing the inflation must rise to 90, then must be considered to do cost reduction through the package that was reduced or the other method so that the price continue to 100. When at one time must have penetrated 100, must be considered in determining the selling price of 200 at the same time by means of increasing the contents of the product volume.
When the Aqua 600 ml was sold of 500 by retail trader in Jakarta, this make the domination. When the price must rise to 600, many pedlars who were happier to offer the other make that still could be sold of 500. The consumer was also happier to buy package water costing 500 than 600.
When the prices to rose because of inflation, made the price new from Aqua to 1000. Precisely, the Aqua sale in the pedlar began to rise again. The consumer chose the Aqua price of Rp 1000 than the other valuable money make 800 or 900.
The psychological aspect in determination of the effective price could be carried out was in selling products that entered the category of accessories, like accessories for mobile phone products, the computer, automotive, et cetera.
Accessories products generally give the quite good profit. Saw, the mobile phone trader many that complained that the level of the profit that was obtained by them very small. For the mobile phone that costing 2 million, his profit sometimes only reached around 25 thousand - 50 thousand. But precisely, the price of accessories that only costing 100,000, level of this profit could reach 50 thousand. Why was like this?
Indeed, the first factor was because of the nonexistence of the standard of the price for accessories. The label/brands was so many and with thousands of models. The consumer will be reluctant to carry out the price comparison through the information collection for a product that the price was not too big and the items like this many. Time that was spent by them not in accordance with the price of the product that would they paid.
The second factor was the psychological factor. The consumer is generally not sensitive when spending money in the big number. So, if buying the mobile phone of 2 million, they were not sensitive anymore when issuing 100,000. Has "gone out 2 million, then they increase 100,000 more, not too many" thought the consumer. It is not surprising, they often will not bargain for the accessories product.
Application tactics of the price in the style of these accessories are generally effective to maximise the profit. So, for products that the standard, we for the matter that competitif. this was needed to facilitate the first transaction. Spent money that the first time, was difficult step and was full of consideration from the consumers. After that, each small increase from the first transaction, tended more was easy. So, 100,000 that was spent after 2 million, was not the same as 100,000 that was spent for the first transaction. Is there yourself was inspired to determine the price by considering these psychological aspects?
There were those who said or believing if the decisive price of the quality of a thing, but according me that not 100% true. For me, expensive or cheap them, a thing was determined by many factors outside from the quality of this thing. If having several friends who worked in a field mentioned Consumer Goods. In the business like this the game of the price its really determined as big the volume of the sale that will be gained but also decisive as big the cost that was spent by the company to increasing their products.
So as if a product had the same quality (or was based on the SNI standard) but could give the different price possibly the other factor really influenced like the existence of the advertisement cost, or the other thing that did not place the consumer so as to form HRP (the Highest of Retail Price). Whereas Psychological this current price according me was not too influential big to the individual consumer or the buyer that bought in a small number, but rather was felt to the buyer in the big amounts. The individual consumer more felt program bargaining banded compared with psychological the price. This I could say because of our consumer already was educated well although this consumer experienced lowest education even.
So be not meaning that if a price of the thing that necessarily 10,000 but on the label was given by the price. 9,950; although the consumer will continue to pay 10,000. This was caused by several factors as the difficulty gave the change in the small change like 50, 25, 10 and 5. Secondly was many consumers who accepted this value as the money for the tip for the cashier who served them / the consumer.
the question was whether we in carrying out the purchase transaction of a thing still saw to psychological the price that he thought was not too big? And we don't became the person who was too Naive by counting on change like 50, 25, 10 and 5 were multiplied by the number of circulating changes that was not asked for by the consumer. If some consumers did not make an issue of him why we made an issue of him. We knew what was done by retailer by giving the price. 10,000 became 9,950 were not too big. Really enabled also if retailer did not provided the change in the fixed price in the 10,000. -
I still believed if having the product that his price was cheap but his quality was better than that was more expensive. At this time, still many decisive producers of the price really depended on The Total of Cost and the Margin that were hoped for. So, the product with the good quality of course could be cheaper, while having efficiency towards the use of time/resources/the raw material/etc. as well as the margin size that was chosen. For the price with the label 9,999, indeed ought to be acknowledged as Psychological by the price, not the Rational price. So, consideration to counted the change was not cared about. Named also, Irrational.
Believed or not if the Drink energy in the Package of the Bottle that did not want to be mention like Kratingdaeng, Lipovitan, Panther, etc. (hehehehe...oops,escaped! ) the total production cost of them only around Rp 900 ? This product could be sold with the price 3,000 as far as 5,500. If like that, we paid more expensive (around 70%) was factor the Irrational. like the make, packaging and the Promotion. Now, without being given by the make, without being advertised, and being packed with the plastic also, the benefit could be obtained by us from this product still same. If being overturned!! Did we want to buy the energetic drink that not have the trade mark, in packed neatly in plastic, and had not been advertised with the price 1000? Our answer could be Rational and Irrational.
In here the madness of marketing, played the perception of the consumer with the price. Saw the price of clothes/the baby's shoes & children, it doesn’t made sense compared with our clothes that his measurement 10x . for me took medicine generic not the problem, continued to recover, because the ingredient its same. But for the outsider/the public, increasingly expensive medicine was increasingly stable results. The person in the village if being sick when not in the injection felt was not yet treated. Realise that cost irrational how many times were I tried to bought Private's product the label in the famous supermarket, in the hope that, this supermarket must consider the quality of vendor and the product, evidently true Private's product the comparable price label with the quality. Its bad . be carefull ! The suggestion for marketers, market survey to price mapping very necessary before we appointed the price to be free from rational or not. Don't want to seized share with the cheap price but even was not believed the consumer.
Many applications where the marketer could make use of this psychological factor. In the world retail for example, there were two matters that often were used as the weapon to compete through the pricing. Retail often used tactics "lost merchandising". There were several deliberate products was made very cheap and when must be unfortunate or his price under cost price. This product was afterwards displayed in front of and was given the big price label. The consumer who entered, immediately will see this price. Retail hoped, since the first time entering in retail this, has been formed by the perception that retail they gave the relatively cheap price.
Many retail especially the supermarket where the customer was the household that was sensitive to the price, to carry out the tactics of the price fitting under the psychological threshold. There was the product that was given by the price 9,995, 49,990 or 99,950. With this price, wanted to be pointed out that their price did not yet penetrate the psychological limit. "Still under 10,000 or under the upper threshold limit of a product".
Price tactics like this must be careful. When so many products were maintained by the price like this, will be formed in the perception of the customer that retail this tried to cheat the customer. In the long term, can damage the image. Therefore, the pricing like this was enough for the several items product then.
The application of the second psychological price was to be connected with currency. especially for this products where the market target was the middle group low. The retail price that was sold by retail, must be striven for did not exceed the certain value of currency. The pricing of a peppermint of 125 were bad. First gave the impression that the price of this product penetrated the currency limit 100. This could give the expensive impression. Secondly, this made both the seller and the buyer were not comfortable in transaction.
So, must be monitored whether the retail price of this product could 100. When usually the shop has the profit 20% of the selling price, then the price of the shop must 80. When to causing the inflation must rise to 90, then must be considered to do cost reduction through the package that was reduced or the other method so that the price continue to 100. When at one time must have penetrated 100, must be considered in determining the selling price of 200 at the same time by means of increasing the contents of the product volume.
When the Aqua 600 ml was sold of 500 by retail trader in Jakarta, this make the domination. When the price must rise to 600, many pedlars who were happier to offer the other make that still could be sold of 500. The consumer was also happier to buy package water costing 500 than 600.
When the prices to rose because of inflation, made the price new from Aqua to 1000. Precisely, the Aqua sale in the pedlar began to rise again. The consumer chose the Aqua price of Rp 1000 than the other valuable money make 800 or 900.
The psychological aspect in determination of the effective price could be carried out was in selling products that entered the category of accessories, like accessories for mobile phone products, the computer, automotive, et cetera.
Accessories products generally give the quite good profit. Saw, the mobile phone trader many that complained that the level of the profit that was obtained by them very small. For the mobile phone that costing 2 million, his profit sometimes only reached around 25 thousand - 50 thousand. But precisely, the price of accessories that only costing 100,000, level of this profit could reach 50 thousand. Why was like this?
Indeed, the first factor was because of the nonexistence of the standard of the price for accessories. The label/brands was so many and with thousands of models. The consumer will be reluctant to carry out the price comparison through the information collection for a product that the price was not too big and the items like this many. Time that was spent by them not in accordance with the price of the product that would they paid.
The second factor was the psychological factor. The consumer is generally not sensitive when spending money in the big number. So, if buying the mobile phone of 2 million, they were not sensitive anymore when issuing 100,000. Has "gone out 2 million, then they increase 100,000 more, not too many" thought the consumer. It is not surprising, they often will not bargain for the accessories product.
Application tactics of the price in the style of these accessories are generally effective to maximise the profit. So, for products that the standard, we for the matter that competitif. this was needed to facilitate the first transaction. Spent money that the first time, was difficult step and was full of consideration from the consumers. After that, each small increase from the first transaction, tended more was easy. So, 100,000 that was spent after 2 million, was not the same as 100,000 that was spent for the first transaction. Is there yourself was inspired to determine the price by considering these psychological aspects?
There were those who said or believing if the decisive price of the quality of a thing, but according me that not 100% true. For me, expensive or cheap them, a thing was determined by many factors outside from the quality of this thing. If having several friends who worked in a field mentioned Consumer Goods. In the business like this the game of the price its really determined as big the volume of the sale that will be gained but also decisive as big the cost that was spent by the company to increasing their products.
So as if a product had the same quality (or was based on the SNI standard) but could give the different price possibly the other factor really influenced like the existence of the advertisement cost, or the other thing that did not place the consumer so as to form HRP (the Highest of Retail Price). Whereas Psychological this current price according me was not too influential big to the individual consumer or the buyer that bought in a small number, but rather was felt to the buyer in the big amounts. The individual consumer more felt program bargaining banded compared with psychological the price. This I could say because of our consumer already was educated well although this consumer experienced lowest education even.
So be not meaning that if a price of the thing that necessarily 10,000 but on the label was given by the price. 9,950; although the consumer will continue to pay 10,000. This was caused by several factors as the difficulty gave the change in the small change like 50, 25, 10 and 5. Secondly was many consumers who accepted this value as the money for the tip for the cashier who served them / the consumer.
the question was whether we in carrying out the purchase transaction of a thing still saw to psychological the price that he thought was not too big? And we don't became the person who was too Naive by counting on change like 50, 25, 10 and 5 were multiplied by the number of circulating changes that was not asked for by the consumer. If some consumers did not make an issue of him why we made an issue of him. We knew what was done by retailer by giving the price. 10,000 became 9,950 were not too big. Really enabled also if retailer did not provided the change in the fixed price in the 10,000. -
I still believed if having the product that his price was cheap but his quality was better than that was more expensive. At this time, still many decisive producers of the price really depended on The Total of Cost and the Margin that were hoped for. So, the product with the good quality of course could be cheaper, while having efficiency towards the use of time/resources/the raw material/etc. as well as the margin size that was chosen. For the price with the label 9,999, indeed ought to be acknowledged as Psychological by the price, not the Rational price. So, consideration to counted the change was not cared about. Named also, Irrational.
Believed or not if the Drink energy in the Package of the Bottle that did not want to be mention like Kratingdaeng, Lipovitan, Panther, etc. (hehehehe...oops,escaped! ) the total production cost of them only around Rp 900 ? This product could be sold with the price 3,000 as far as 5,500. If like that, we paid more expensive (around 70%) was factor the Irrational. like the make, packaging and the Promotion. Now, without being given by the make, without being advertised, and being packed with the plastic also, the benefit could be obtained by us from this product still same. If being overturned!! Did we want to buy the energetic drink that not have the trade mark, in packed neatly in plastic, and had not been advertised with the price 1000? Our answer could be Rational and Irrational.
In here the madness of marketing, played the perception of the consumer with the price. Saw the price of clothes/the baby's shoes & children, it doesn’t made sense compared with our clothes that his measurement 10x . for me took medicine generic not the problem, continued to recover, because the ingredient its same. But for the outsider/the public, increasingly expensive medicine was increasingly stable results. The person in the village if being sick when not in the injection felt was not yet treated. Realise that cost irrational how many times were I tried to bought Private's product the label in the famous supermarket, in the hope that, this supermarket must consider the quality of vendor and the product, evidently true Private's product the comparable price label with the quality. Its bad . be carefull ! The suggestion for marketers, market survey to price mapping very necessary before we appointed the price to be free from rational or not. Don't want to seized share with the cheap price but even was not believed the consumer.
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