What category does Price Anchoring belong to?

Price Anchoring belongs to the "Concepts" category in personal knowledge management and productivity.

What are the key topics related to Price Anchoring?

Key topics related to Price Anchoring include: businesses, pricing, psychology.

What are alternative names for Price Anchoring?

Price Anchoring is also known as: Anchor pricing, Reference price.

Price Anchoring

A pricing psychology technique where the first price shown influences perception of subsequent prices.

Also known as: Anchor pricing, Reference price

Category: Concepts

Tags: businesses, pricing, psychology

Explanation

Price Anchoring is a cognitive bias used in pricing strategy where the first price a customer sees serves as a reference point (anchor) for evaluating all subsequent prices. A high anchor makes other prices seem reasonable by comparison. This is why premium options are often shown first, or why 'was $200, now $99' is effective. Understanding anchoring helps both in pricing your own products and recognizing when you're being influenced by anchors in purchasing decisions.

Related Concepts

Anchoring Bias
Tiered Pricing
Loss Aversion

← Back to all concepts