What Is Psychological Pricing And What Is A Price Lining Strategy?

Pricing is one of the 4 P's of the marketing mix, having tremendous importance in terms of developing the marketing campaign of the product.  It is one of the most important determinants on which customers usually base their buying decisions.  However depending upon the nature of the good or the service, customers prioritize the factors that shape up their buying behavior – in other words, price is not always the most important determinant in shaping the buying behavior of the customers.  

As far as psychological pricing goes, this is normally used in the case of high-priced luxury goods or more precisely speciality products.  This involves charging a high price for the brand so as to project an exclusive and 'high-class' image of the brand in front of the consumers.  It works with the consumers and is quite an effective pricing strategy.  As for price lining strategy, it takes place when a company offers variations in the prices of the same product in accordance with the high-quality product to the not-so-high-quality product.