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Contrast Pricing

 

DisciplinesMarketing > Pricing > Contrast Pricing

Description | Example | Discussion | See also

 

Description

Set your prices based on a comparison with other items. The comparison item can include similar products from competitors, other products in your own range or even some other comparison that customers might make.

 

Example

A firm has a high-priced item on a product list. They sell very few, but they also know that this makes other items on the list look cheap.

A company designs products and sets its prices with deliberate reference to other products in the market, including competitor products, and with the intent to make its prices look good.

A marketer of luxury branded goods works on the principle of charging at least twice as much as non-luxury similar goods.

A beer company marketed its product as 'reassuringly expensive.'

Discussion

We often make decisions about things through a principle of contrast, typically comparing two items and contrasting various attributes, including price. When prices are similar, then we may well contrast via features and benefits. When product attributes are similar, then price may be used. Even though we are using contrast, we often do not think too hard about how this is happening. This is often used by marketers who deliberately use the contrast effect in persuasive pricing strategies.

Sales often use contrast pricing as they compare the sale price with the 'normal' price. Discounting can also use this principle as you offer customers a 'special deal if you buy today'.

See also

Contrast principle, Premium Pricing, Promotional Pricing, Discountable Pricing, Price Anchoring

 

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