Eight pricing strategies that drain your wallet | The Star Online

THERE are many different pricing strategies that all attempt to do the same thing: to make you voluntarily spend as much money as possible.

Below are eight pricing strategies that are used against your wallet.

1. The number “9”is a very powerful psychological number: many would perceive something which costs RM199 as much cheaper than something which costs RM 200, while the difference is only a single Ringgit. This explains why so many prices end with a 9. In fact, when two promotions of the same product (originally priced at RM60) were tested, the one that was discounted to RM49 did better than the one discounted to RM 45, despite the latter being discounted to even less!

2. Freemium pricing is used in many apps, notably Angry Birds, Farmville and the ever-popular Pokémon app. Although the games are free to download, once you are addicted you will have to spend real money to buy a virtual currency to continue to play, to upgrade or to buy tools.

3. Anchor or decoy pricing is used to manipulate your reference set. By offering one extremely expensive product (typically called the diamond, VIP, premium package), all the other packages seem reasonably priced in comparison. How do hotels sell a RM10,000 VIP suite? By putting it next to a RM60,000 presidential suite. The presidential suite is not even meant to be sold (although it would be nice if it was occasionally rented by a rock star or celebrity)!

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Eight pricing strategies that drain your wallet – Business News | The Star Online.