Price Anchoring Effect’s Implications on Marketing with the 6-STEPPS Framework.

Abstract

The anchoring effect is a psychological effect in which providing an external anchor value in a context can influence an individual’s perception of the actual value. In business and economics, this effect is transformed into the Price Anchoring effect where businesses attempt to use this psychological process to manipulate customer’s perception of appropriate and preferable prices for a product. A case study analyzed the financial implications of this effect, by posing external anchor values to experimental units, and then questioning them about the appropriate prices of a product, the experimenters found that the price anchoring effect can allow businesses to influence their consumer’s perceptions of appropriate pricing, thus implying increases profitability. The explanations to price anchoring effects vary, some of them relate to the 6-STEPPS principles of marketing, being Social Currency, Trigger, Emotions, Public, Practical Value, and Stories. By combining the uses of the 6-STEPPS principles and the price anchoring effect, businesses could also succeed in marketing.