Office for National Statistics
Pricing Strategy
Article

Pricing Strategy

How Our Brains Keep Us Stuck

Melina Palmer
Behavioral Economics.com, 2023
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Editorial Rating

8

Qualities

  • Applicable
  • Well Structured
  • For Beginners

Recommendation

Economist Melina Palmer offers some good advice about pricing, a subject many businesses find difficult to tackle. She says that successful product and service pricing requires a focus on what is relevant to the product or service, and a disregard for extraneous detail. She also counsels business leaders to employ human behavioral psychology at every planning stage. Marketers and finance professionals will find her concise article a useful introduction to pricing strategy.

Summary

Common approaches to pricing often flummox business owners.

Setting prices for products and services is often a pain point for company leaders. Opinions on the best approach abound, as a simple internet search will show. But much of the available guidance on pricing suffers from an excess or a lack of sufficient detail, and that can inhibit pricing newcomers.

A plethora of choices often leads to decision creep and intellectual paralysis, hindering any progress. The “paradox of choice” keeps businesses stuck in the status quo.

Pricing guidance needs to account for psychology.

Pricing decisions must incorporate psychology, something that much of the ...

About the Author

Applied behavioral economist Melina Palmer is the CEO of The Brainy Business.

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