Charm Pricing Strategy in Retail Marketing
How does charm pricing work in retail marketing?
Charm pricing is a common marketing strategy used by retailers to make products appear more attractive. How would retailers list an $8.00 item when using charm pricing? a)$7.99 b)$8.00 c)$8.01 d)$8.10
Answer:
Charm pricing is a strategy where a retailer lists a product for slightly less than a round number to make it appear more attractive. In the case of an $8.00 item, a charm pricing technique would list this as $7.99.
Explanation: In the context of charm pricing, retailers adjust the price of a product by a small amount to make it appear more attractive to consumers. In the case of an $8.00 item, option a) $7.99, is an example of charm pricing. This is because the price is minimally less than a round number, which can influence a consumer's perception of the price, making it seem like a better deal than it actually is. For example, if you consider the prices listed here: $10.00, $6.50, $10.00, $32.50, $7.00, $10.00, $35.00, in each case a retailer would likely list these using charm pricing as $9.99, $6.49, $9.99, $32.49, $6.99, $9.99, and $34.99 respectively.