Psychological price is the pricing strategy that takes into account the psychological factors and perceptions of consumers in determining the price of a product or service.
It involves considering how consumers perceive the price in relation to the value they expect to receive from the product or service.
One common psychological pricing strategy is using a “charm price,” which is a price that ends in the number nine. For example, pricing a product at $9.99 instead of $10.00. This is believed to create the perception among consumers that the price is significantly lower than it actually is.