A supermarket places its store brand of blackberry jam priced at $5 per jar in the fruit preserves aisle, alongside the jam jars of a better known brand-whose products are priced at $8 apiece. Store managers reason that customers are more likely to choose the store brand instead of the better-known brand when they realize the price difference. What price adjustment strategy is evident in the supermarket's reasoning?

Question

Quizplus · Accepted Answer

The strategy used by the supermarket is psychological pricing, as they are using the perceived value of the price difference ($5 vs $8) to influence customer behavior and encourage them to choose the store brand over the better-known brand.

A Supermarket Places Its Store Brand of Blackberry Jam Priced