It is a concept which states that certain prices have impact on buying power. These prices catch the eye of the customer and results into buying of the product. These are also referred as magic prices or charm prices.
Customers buy with certain prices or price levels.
Advantages: -
Dis-advantages: -
Example: - Rs.99 instead of Rs.100 creates a psychological impact. The difference is just 1 rupee but it looks less than hundred. In the end you might end up paying 100 in both the cases
Bata uses this psychological pricing in all its products. All products are priced like 999.99, 399.95 etc
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