ConceptFRAMEWORK

Reference price

reference prices

The reference price is the price a buyer considers normal for a product, against which every actual price is judged. It is formed by past purchases, prices of alternatives and the context of the moment, and it is malleable: a list price, a crossed-out price or a pricier variant alongside shifts the anchor. That makes the reference price the psychological foundation under discounts (which work against the anchor) and under price increases (which hurt once they pass it). Pricing without knowing which anchor the customer holds is steering in fog.

Covered in

A4-02 The Behavioural Economics of Price: Reference Prices, Anchors and the Pain of PayingCore lecturestill locked

A4-04 Price Research: Gabor-Granger, Van Westendorp, Conjoint — and the Limits of Eachstill locked

A4-05 Price Architecture and Versioning: One Product, Many Pricesstill locked

A4-06 Promotions and Their Long-Term Damage: The Ehrenberg-Bass Evidencestill locked

A4-07 Premium and Luxury: Where Price Itself Creates Valuestill locked

A4-08 Price Wars: How They Start and How to Stay Outstill locked

A4-09 Subscription and Dynamic Pricing: What the Market Bears and What Customers Deem Fairstill locked

A4-10 The Pricing Audit — Capstonestill locked

A7-01 Why A7 Is Not A10 — The Product Marketing Remitstill locked

A7-05 Category Entry Points for New Productsstill locked

A7-06 Pricing the New — Skimming, Penetration and the Value Anchorstill locked