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  • August 2023
  • Background Note
  • HBS Case Collection

Pricing and Customer Psychology

By: Elie Ofek
  • Format:Print
  • | Language:English
  • | Pages:20
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Abstract

This note provides an overview of how psychological principles may be used as part of a seller’s pricing strategy. The note defines the concept of psychological pricing and explains the motivations for firms to engage in it. Prominent practices and tactics, with detailed reference to the psychological and behavioral principles at play, are featured. Numerous examples are given to illustrate the material covered. The note also highlights several concerns companies might have in employing psychological pricing techniques, along with thoughts on how to mitigate or counter these reservations.

Keywords

Price; Marketing Strategy; Consumer Behavior

Citation

Ofek, Elie. "Pricing and Customer Psychology." Harvard Business School Background Note 524-019, August 2023.
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About The Author

Elie Ofek

Marketing
→More Publications

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    Lowe’s: Improving the Total Home Strategy

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    Customer Acquisition and the Cash Flow Trap Supplement

    By: E. Ofek, Barak Libai and Eitan Muller
    • April 2025 (Revised April 2025)
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    Customer Acquisition and the Cash Flow Trap

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More from the Author
  • Lowe’s: Improving the Total Home Strategy By: Elie Ofek and Sarah Mehta
  • Customer Acquisition and the Cash Flow Trap Supplement By: E. Ofek, Barak Libai and Eitan Muller
  • Customer Acquisition and the Cash Flow Trap By: E. Ofek, Barak Libai and Eitan Muller
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