When a retailer puts a sign on a product that says "reduced" or a retailer puts a sign on a product that says "compare to XXX at $10.00 more," the retailer is encouraging what kind of pricing psychology for its shoppers
A) Reference pricing
B) Price cues
C) Price leadership
D) Going-rate pricing
E) None of the above

Question

When a retailer puts a sign on a product that says "reduced" or a retailer puts a sign on a product that says "compare to XXX at $10.00 more," the retailer is encouraging what kind of pricing psychology for its shoppers
A) Reference pricing
B) Price cues
C) Price leadership
D) Going-rate pricing
E) None of the above

Quizplus · Accepted Answer

By incorporating language such as "reduced" or "compare to XXX at $10.00 more," the retailer is providing a reference point for shoppers to compare the current price to. This encourages shoppers to consider the perceived value of the product based on the provided reference point and make a decision based on that comparison, which is a key aspect of reference pricing.

When a Retailer Puts a Sign on a Product That