Blog
Business Pricing Tactics Under Scrutiny
12th December 2010
Martin Hickman’s Consuming Issues column in the Independent this weekend has a piece on some of the tactics used by retailers to take commercial advantage of consumers. These pricing schemes include:
1/ Drip pricing - where extras are added onto the original price and customers are unaware of the full price they have to pay
2/ Bait sales - where customers are lured in with a discount price, only to discover the discount has run out or only applies to a few items
3/ Complex pricing - such as bundle packages or tariffs; time limited, volume and free offers
4/ Reference pricing - which cites previous prices or recommended retail price to make a particular offer seem more attractive
5/ Multiple unit price promotions - such as ‘three for two’
6/ ‘Free’ products offered as part of a package - such as ‘first two months free’
The focus of the article is on so-called reference pricing where products are marked down from their original price. And it links to an ongoing investigation by the OFT into pricing behaviour. The author Philip Graves is also mentioned and his work on marketing and consumer behaviour can be researched by going to his own web site.
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.