The 0.05 cent question ... price points (1 Viewer)

[Leo_E]

What are price points?

I've had a couple of definitions given to me including:

-a 'new' method of evaluating what price works best
-a way to make prices look smaller than they really are
-$9999.95

can ne1 give me a straight explanation of price points?

 

[aussiechica]

From my pretty notes:

Price points are a pricing method of using one base product to reach numerous target markets.
Using price points, a business will start a product at a particular price. This original product will become the base product. The business will then create a number of slightly differentiated versions of the product (usu by adding extra features) and upping the price with each new version.
This can create a range of products with different prices, all revolving around one generic product base.


Pretty much, just say with like a discman, you have the basic discman. Then, if you add radio, you up the price accordingly. You add say, a remote, you up the price some more. You add glow in the dark pulsating headphones price up so more etc etc etc


I dunno what the hell you call that stuff you suggested but theres none of that in my text . Hope that helps

 

[Dash]

Price points is in a way psychological pricing.
Take an example: A business owner puts 3 CDs for sale. He puts one at $20, the other at $29 and the last at say $40. Now, a customer that looks at these three CDs will associate their price points with quality. So they will assume that the more expensive CD has better sound quality or better music or something. Also, as aussiechia suggested, marketers have to develop significant differences in quiality, design or function to support the price differences. So to sum it all up, the longman definition states that Price points are psychological references for consumers that indicate relative quality.

 

[Leo_E]

kk thx alot, I think that explains it then.