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Skill Module 9.3
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Pricing Psychology

Customers often view pricing as a proxy for quality, especially when it is difficult for them to truly evaluate the products:

  1. Tell your friends that you are conducting a taste test and provide three samples of the same product in containers marked A, B, and C. (Choose products for which brands are not easily visually detected, such as pasta, soft drinks, etc.)
  2. Predetermine three price points: one that is about average for the product, one that is relatively high compared to the competition, and one that would reflect the "discount" brand price.
  3. As your friends sample each of the three, give them some data about the product. Include exactly the same data about each—in a different order—except for the suggested retail price. (For example, soft drink A might be sugar-free, vitamin-fortified, cola-based, only one calorie, manufactured in the United States, and available locally for 50 cents. Sample B sells for 75 cents and is cola-based, and is manufactured in the United States as well. It has only one calorie and is sugar-free and vitaminfortified. Sample C is an American, cola-based, vitamin-fortified, soft drink with no calories. It retails for $1.00 and is sugar-free as well.)
  4. Allow your friends to taste each product once, and do not permit them to go back and resample. Between samples, provide a sip of water or a cracker to remove any lingering taste—anything to separate the three samples slightly.
  5. After tasting all three, ask them to discuss each one of them, stating what they did or did not like about the product.
  6. If done in a classroom setting, provide a score sheet for each student to rate the product.
  7. Often you will find that the more expensive product's characteristics are rated higher.

Note: This test often works with similar results on other "quality indicators" such as the store where something is purchased—the item bought at Wal-Mart versus an upscale department store—or country of origin—products from a country with a good reputation versus a less-developed country (e.g., wine from France or Bulgaria).








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