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

custom home cleaning Wilmette ..

In The News:

Scammers create fake Evite invitations that mimic legitimate event emails, requiring users to verify senders and use antivirus software for protection.

The new Apple Watch hypertension feature passively monitors blood pressure patterns over 30 days using sensors to detect chronic high blood pressure signs.

Chrome extension spyware disguised as a free VPN service highlights security risks after it captured private browsing data from trusted sites.

New research shows how fatty acids in cooking oil can safely dissolve and recover silver from circuit boards without harmful chemicals or environmental damage.

The Fox News AI newsletter gives you information on the latest AI technology advancements, and about the challenges and opportunities AI presents now and for the future.

Anthropic investigates alarming AI abuse case where hacker automated entire cybercrime campaign using Claude, stealing sensitive data from defense and healthcare firms.

TikTok, Meta and YouTube restrict Charlie Kirk shooting videos with age gates and warnings while X faces criticism for allowing continued circulation.

Cybercriminals use fake troubleshooting websites to trick Mac users into running terminal commands that install Shamos malware through ClickFix tactics.

San Francisco startup Fable launches Showrunner, an AI platform dubbed the 'Netflix of AI' that generates animated episodes from text descriptions with Amazon support.

Apple raised iPhone prices for some models despite receiving tariff relief from President Donald Trump, with the new lineup starting at $799 for the base model.

A two-story 3D concrete printed home in Western Australia demonstrates faster construction methods that could reshape American housing amid rising costs.

Credit scores remain important during retirement for insurance rates and housing applications, while seniors become prime targets for identity theft and financial scams.

Scammers now send unexpected packages with QR codes that redirect victims to fraudulent websites or download malicious software to steal sensitive information.

Meeting AI tools record private conversations alongside work discussions, creating privacy risks that can be managed with proper settings and awareness.

Hotel privacy concerns are valid but rare, with methods to detect hidden tech using smartphone flashlights, mirror tests and scanning apps.

Improve your Wi-Fi speed and reliability with 10 simple router optimization tips that don't require special apps or expensive subscriptions.

A Columbia University breach exposed names, Social Security numbers and academic records of nearly 869,000 people, with notifications beginning in August.

Rental car drivers use AI-powered apps like Proofr to protect themselves from unfair damage fees as major companies deploy automated inspection tools.

Fox News' AI newsletter brings you the latest on technology advancements around artificial intelligence.

OnTrac data breach between April 13-15, 2025, exposed personal information of over 40,000 people including Social Security numbers and medical records.

A woman named Wika announces her engagement to an AI chatbot sparking worldwide debate about virtual relationships and technology.

The notorious people search site National Public Data relaunches despite a previous breach affecting 3 billion individuals, raising fresh privacy concerns.

Revolutionary TRAUMAGEL gel controls life-threatening bleeding from gunshot wounds and traumatic injuries, helping first responders prevent prehospital deaths.

Protect your home network by enabling proper encryption, creating strong passwords, checking connected devices and using VPN and antivirus software.

The Navy's solar-powered Skydweller drone flew nonstop for 73 hours in Mississippi, proving renewable energy can power long-endurance military missions.

The Impact of Price Popularity on Profits

Strategic Planning