Psychological Pricing Strategies: A Critical Review Of Its Effects On Brand Perception And Consumer Behaviour

Abstract

The study examines the effect of psychological pricing strategies on brand perception and consumer buying behavior. With a sample size of 253 respondents, this study aims to uncover the underlying psychological mechanisms that drive consumer responses to various pricing strategies such prestige pricing and charm pricing and effect of these strategies in shaping consumers' perceptions of brand-value and willingness to purchase. The primary data collected using a survey among individuals from diverse demographic backgrounds is analysed using statistical software tools such as JAMOVI.2.3.28. Utilizing statistical tools such as regression analysis, correlation analysis, ANOVA and t-tests, the study seeks to discern significant differences, influences, and relationships between the variables under scrutiny. Key findings from the research suggest that psychological pricing strategies significantly influence both brand perception and consumer buying behavior. Specifically, pricing tactics such as charm pricing and prestige pricing can enhance brand image, increase perceived value, and stimulate purchase intentions. The study offers valuable insights into how to design pricing strategies that resonate with consumer motivations and preferences by unveiling the multifaceted relationship between these variables. Background: In an increasingly competitive consumer market, organizations rely on pricing strategies to influence consumer behaviour and enhance profitability. Psychological pricing, emerging as a widely used approach, leverages consumers’ cognitive and emotional biases, recognizing that purchase decisions are often unconscious and influenced by price cues rather than pure rationality. Understanding how different psychological pricing techniques shape value perception is therefore essential for marketers to design effective pricing strategies aligned with target markets and product positioning Materials and Methods: The research approach used in the study involves a combination of quantitative, descriptive and cross sectional to gain a comprehensive understanding of the phenomenon. The research is quantitative as it involves collecting numerical data through surveys to analyze the relationships between pricing strategies and consumer behaviour. Results: The results of the study confirm a significant impact of psychological pricing strategies on brand perception and consumer buying behaviour. Conclusion: Brands must align their pricing strategy with their target market and overall brand positioning to effectively manage consumer perception and behavior.