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 ?
The alerts may instruct staff to take specific actions such as selling the script for cash at usual and customary pricing rather than adjudicating it and enabling the PBM to claw back the patient's co-pay from the pharmacy.
In this sense, there is a variety of psychological prices, among which we encounter: reference pricing, prices for grouped products, everyday low prices, "magical" prices, customary pricing, prestige pricing.
* Customary pricing The price of certain goods is established on the basis of traditions, with a preference in some cases for the modification of the quantity of the product unit than of the price, so that the sales are not reduced.
In particular, we examine market-level, quarterly prices from 1990 to 2002 and find evidence of customary pricing.
These data are consistent with customary pricing, which has also been called psychological pricing (Friberg and Matha 2004; Kreul 1982) or odd pricing (Stiving and Winer 1997).
Quantities over 30 days or above recommended common dosages will be at usual and customary pricing. A complete list of more than 250 drugs included on the Tulsa-area program is available at pharmacy counters and online at: www.MyPyramidOnline.com, and the list of $3 generics for Ramey, Price Cutter, Price Cutter Plus, and Smitty's stores is online at www.PriceCutterOnline.com.
AWP is analogous to, but even more vague than, reasonable and customary pricing in health care.
This is likely due, at least in part, to increases in price controls on other health care services by payers; doser scrutiny of inpatient care quality by the Joint Commission on Accreditation of Healthcare Organizations; lack of federal and state regulations; lack of formal references for usual and customary pricing; and lack of familiarity with new health care delivery settings, technology, and protocols among insurance claims reviewers and case managers.
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.
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. Once again, having an itemized bid or invoice and checking the seven categories, including pack-out, will identify pricing discrepancies.