Home
>
Strategic Planning
>
The Impact of Price Popularity on Profits

The Impact of Price Popularity on Profits

The goal of almost every business owner is to generate a profit either for themselves or their shareholders. This can be challenging at best. So much thought and effort go into running a business, accounts payable, accounts receivable, dealing with vendors, customers, etc. Because of this people sometimes do not focus on one of the most important factors- pricing. Knowing how much you can charge for your product or service is invaluable information. Businesses typically want to increase volume and prices at the same time. In a perfect world that would be easy to accomplish, yet we do not live in a perfect world. So just how do businesses go about deciding how much to charge for a product or service?

One way that businesses do this is through trial and error, by seeing how much they can charge before volume starts to drop off. This is a very ineffective method, but is practiced by more businesses than you may realize. Another method is determining what percentage of profit over cost that you want. Perhaps you sell automobiles and decide that you require a profit of 5% on every car that is sold, and then you price accordingly. While this method is good for determining if you are going to cover overhead and other expenses, it may not be the best way to increase sales. A person can spend weeks trying to determine the correct price for their products and services. Economists have many formulas to determine price elasticity, market demand, and cost shifting. All of these economic formulas can be helpful, but are very time consuming and sometimes require hiring a consultant.

There are some easier ways to go about setting prices. Once you have determined a 'ballpark' price that covers your costs, you can begin adjusting it up or down to maximize profits. A relatively new concept that is garnering a great deal of attention from businesses big and small is the concept of price popularity. Price popularity is just what the name implies, looking at how popular, or how frequently a price is used. For example, surely you have noticed how many commercials on television sell items for $19.95. This is a very popular price when compared to $19.77. Do you see many products priced at $19.77? The frequency in which consumers see a price has a strong effect on their purchasing decisions.

Knowing about price popularity, and how to apply it, can help turn a slow selling item or service into a highly demanded item or service. Should a business set a price at $19.99 or $19.95? Does a price read differently to a consumer if it appears as $72.00 or $72? Research shows that it does in fact affect a consumer's decision making. Gaining access to the research that shows the most popular prices, the ones that consumers feel most comfortable with, is a precious resource to a business. This is much easier than spending the numerous hours of financial analysis to make an educated guess at what volume business will drop off if you raise or lower the price by a mere few cents.

The more a business owner knows about pricing strategies the more successful they will be in generating profits. Incorrect pricing can have devastating effects on a business. While many spend time trying to determine a break-even analysis and price elasticity, how many have really considered the psychological appearance of a price and the popularity of that price.

In today's extremely competitive business world a business owner needs every advantage they can get to outwit their competition. Researching the information available on price popularity simply puts a business one step ahead of their competitors.

About The Author

Konstantin Goudkov studies the psychology of pricing, ways to manipulate prices for maximum profit, and tactics to control consumer price perception.

You can find his latest report at: http://www.pricepointreport.com

maid service near Lake Forest ..

In The News:

New phishing platform QRR targets Microsoft 365 users across 1,000 domains in 90 countries. Learn how to spot fake login pages and protect your accounts.

OpenTable now uses AI to track your dining habits and share insights with restaurants. Learn what data they collect and how to protect your privacy.

Google's discontinued Nest thermostats still secretly upload home data to company servers despite losing smart features, raising serious privacy concerns.

New Android malware NGate steals NFC payment codes in real-time, allowing criminals to withdraw cash from ATMs without your card. Learn protection tips.

DoorDash confirms data breach exposing customer names, emails, addresses after social engineering attack. Learn how to protect yourself from scams.

Concerned about Google's AI scanning your Gmail? Learn how to disable Gemini features that access your emails, Drive files and Chat messages for privacy.

Google warns Android users about dangerous fake VPN apps hiding malware that steals passwords, banking details and personal data from phones and tablets.

Apple's digital passport feature lets iPhone users breeze through TSA checkpoints this holiday season using Digital ID technology at 250+ airports.

A new phishing scam targets family photos with fake "Cloud Storage Full" alerts. Criminals steal credit card information through fake sites. Learn protection tips.

South Korean scientists create ultra-thin fabric muscles that turn clothes into robotic assistants, lifting 33 pounds while weighing under half an ounce.

Archer Aviation has acquired Hawthorne Airport for $126M to launch an LA air taxi network ahead of the 2028 Olympics, featuring AI-powered eVTOL operations and next-gen aviation tech.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Fake AI apps disguised as "ChatGPT" and "DALL·E" are flooding app stores with dangerous malware that steals data and monitors users without detection.

Fake buyers demand specific vehicle reports from unknown sites to steal credit card information from car sellers, but warning signs can help identify these scams before paying.

Android users can now manage apps across multiple devices more easily with Google Play Store's updated remote uninstall button in the latest update.

NASA's Perseverance rover discovers shiny metallic rock on Mars that could be a meteorite from an ancient asteroid, containing high levels of iron and nickel.

Holiday scams spike during Black Friday and Cyber Monday as criminals exploit your leaked personal data. Learn how to protect yourself from fake stores and phishing.

Commerce Department proposes TP-Link router ban over Chinese security risks. Learn how this potential prohibition could affect your home network and devices.

Hyundai AutoEver America suffered a data breach affecting 2,000 current and former employees, exposing names, Social Security numbers and driver's license information.

Washington court rules automated license plate reader images are public records, even when stored by vendors like Flock Safety, setting precedent for transparency.

Fake airline texts claiming flight cancellations are targeting travelers with convincing scams. Learn how cybercriminals steal personal data and credit card info.

Discover how iOS 26's new Adaptive Power feature automatically extends iPhone battery life by learning your usage patterns and adjusting performance intelligently.

New TikTok malware campaign tricks users into running PowerShell commands that download Aura Stealer, which steals credentials and authentication tokens.

Gaia Family offers fixed upfront pricing for IVF cycles with unlimited embryo transfers and financial protection, partnering with over 100 U.S. fertility clinics.

The Jetsons Act aims to position Pennsylvania as a leader in advanced air mobility by establishing regulations for hybrid ground-air vehicles.

The Impact of Price Popularity on Profits

Strategic Planning