Shot #12 : Sort Prices from High to Low
Hi there,
This shot is again from Nick Kolenda's post- Psychology of Pricing.
The post has so many golden nuggets that it's difficult to summarize in 1 shot.
There was an experiment conducted by Suk, Lee, and Lichtenstein (2012) in a bar for over an 8-week span.
The researchers changed the sequence of beer prices from ascending to descending order to see if it influences the sales of beer.
Result? The bar owner made an extra $0.24 for every beer sold.
Why did that happen?
The Researchers gave the following 2 theories
Anchoring Effect
While comparing products, customers use an initial price to generate their reference (anchor) price. If the initial price is high, customers generate a higher reference price.
Loss Aversion
When products are sorted by ascending price, customers view each new product as a loss in price.
But the exact opposite happens when products are sorted by descending price, customers view each new product as a loss in quality.Thus, they feel motivated to retain a higher quality (more expensive) product.
Info and Image credits: Nickkolenda.com
Thanks,
Luv
Co-founder ExperienceSaga.com
(About Me)Missed out on any previous marketing shot? Read all the shots here
You are receiving this email because you subscribed for it on Myventure or directly via substack.
