psychological pricing

(redirected from Customary pricing)

psychological pricing

an approach to PRICING which pays particular attention to the effect which a product's PRICE has upon consumers' perceptions of the product. This has a number of dimensions, including:
  1. the charging of very high prices for certain (generally high-quality) consumer products to convey an impression of product exclusiveness. High prices may appeal to particular high-income customers who wish to possess the product as a status symbol (‘conspicuous consumption’);
  2. the charging of high prices for technologically sophisticated consumer products in order to convey an impression of superior product quality and performance.

    This may play an important part in the buying decision when consumers are ignorant about the comparative properties of the brands of the product facing them, and thus use price as an indicator of quality;

  3. the charging of a price for a product which is just below a ‘round figure’ threshold price (for example 99 pence rather than £1) so as to create an impression that the product's price is considerably below the threshold;
  4. the charging of relatively low prices for frequently purchased and familiar products so as to create or reinforce an impression of value for money.
References in periodicals archive ?
In particular, we examine market-level, quarterly prices from 1990 to 2002 and find evidence of customary pricing.
Vendors who engage in customary pricing tend to charge prices that end with a 9 or 8 and particularly avoid prices that end with 0 (Gedenk and Notes: Data: C2ER prices for Monopoly[R] board game, by metropolitan area, 1990 quarter 1 through 2002 quarter 4.
from 1990 to 2002 are consistent with customary pricing.
Quantities over 30 days or above recommended common dosages will be at usual and customary pricing.
AWP is analogous to, but even more vague than, reasonable and customary pricing in health care.
Impact of Changes in Home Care Industry 3rd Quarter 1992 1st Quarter 1993 Number of Consults 110 95 Total provider charge $364,719 $294,448 Total reasonable and customary pricing $228,148 $178,151 Cost reduction 37% 39% Upcharge 60% 65%
Thus, MMACs affect the calculation of customary pricing screens.
In FSY 1988, customary pricing screens had less of an impact on allowed charges than on the number of services--only 30 percent of total allowed MSC charges are represented by services (more than 42 percent of total) with a customary-charge price determinant.
Actual consumer savings may vary depending on the pharmacy's customary pricing for the specific medicine and the savings offered by the company that makes it.
It is prudent to check the labor rate breakdown, because the rate for this service is clearly defined in the various estimating software, as is the usual and customary pricing.
HNC Insurance Solutions' new auto claims software package offers a variety of integrated features which provide support for all the managed care needs of an auto medical insurer, including: A sophisticated bill repricing function which ensures that discounts from PPO networks, fee schedules, and appropriate usual and customary pricing are captured and that duplicate and excessive charges are identified.
Pharmacies in the Performance network have agreed to be evaluated against a set of criteria that measures their performance in such areas as purchasing practices, generic substitution and usual and customary pricing.