Should a price point be $2.99 or $3.49? Should promotional pricing be 2 for $5 or 2 for $6? Today’s consumers are savvy shoppers and minor price shifts may make a significant sales impact – up, or down.
Pricing communicates specific messages to shoppers – likewise, pricing modifications offer additional impactful cues to shoppers. Price promotions work, because shoppers associate “promotion” with “bargain” – and don’t we all want to believe we are getting a deal?
Most market research anticipates that consumers make rational decisions. That research forces participants to use analytical, rational thinking when, in real life shopping scenarios, consumers use quick, often subconscious thinking!
But behavioral economics tells us consumers are not rational when shopping. Rather than reading all of the copy on a package and processing each of its benefits relative to a competitor’s, consumers instead search for simple cues that bring positive associations to their minds – often subconsciously.