Great thread, some golden info here.Cheap Vodka: $9.99
Mid-tier Vodka: $14.99
The good stuff: $19.99
With this example ^^, what mental effect will these prices have on the consumer? The first two Vodka's are exactly the same as the first example after-all...
The result will likely be that most people will purchase the mid-tier Vodka. Why?
1) The cheap Vodka now looks low quality compared to the other two. "I deserve better than that!"
2) The mid-tier Vodka is under a lower mental price barrier compared to the higher priced Vodka. "That's a good deal!"
3) The good stuff looks rather expensive, as it is above the mental price limits of the mid-tier Vodka and the cheap Vodka. "Ohhh that's too much...maybe after my next paycheck!"
To get this effect, does there have to be a certain increase between the tiers?
For example,
Cheap: $4.99
Mid Tier: $19.99
Top Tier: $39.99
vs.
Cheap: $9.99
Mid Tier: $14.99
Top Tier: $19.99
Will this yield the same results despite having larger gaps in pricing, or would the larger price gaps cause the cheapest to be most appealing? And would the answer change for higher priced items?
For example(my situation): Could the $100 dollar difference between the cheapest and mid tier be a mental price barrier causing them to buy the cheapest instead?
Cheap: $75
Mid Tier: $175
Top Tier: $250
vs.
Cheap: $99
Mid Tier: $175
Top Tier: $250
Dislike ads? Remove them and support the forum:
Subscribe to Fastlane Insiders.