Psychological pricing is a marketing method designed to work on consumer perceptions of pricing structures. This is literally a 'value judgment' in dollar terms. Sales resistance is often based on a perception of over-valuation, and sales potential is usually based on a very fundamental level in terms of actual prices. This method is a sampling approach, using price brackets for goods and services to establish a meaningful response. It's a very widely used method of creating price structures which the producer can use as a costing base and for sales projections.
Examples of Psychological Pricing:
The product is a box of waterproof matches. What would you pay for this product?$1.00 for 100
$1.20 for 150
$0.75 for 50
Price tag fail.