ABSTRACT
This chapter explores key behavioral aspects of pricing, drawing on links to the rapidly changing world of technology. It suggests by contrasting traditional perspectives on price with more contemporary perspectives on price. The chapter examines the notion of perceived value and its multifaceted nature. It outlines the key behavioral aspects of price including internal and external reference prices, pricing and consumer perceptions of fairness, price endings, decreasing and increasing price, price – quality perceptions and consumer price knowledge. A pricing strategy involves setting a price that creates an incentive for consumers to buy a product or service and generate sufficient revenues to encourage the firm to sell that product. The economic notion of incentive to buy is when perceived economic value is greater than price. This gap is sometimes referred to as acquisition value or consumer surplus. The chapter describes how research into pricing and using behavioral concepts represents a significant source of marketing innovation for alert sellers.
