It’s a curious thing, what pricing does to the brain. Have you ever bought something because it was ‘on sale’ even though you didn’t need or even really want it, but it seemed too good a deal to miss? We all subconsciously associate price with many emotions when it comes to buying products and services.

Due to this subconscious influence that pricing and payment strategies have on the consumer’s brain, however, marketers find themselves faced with a moral dilemma. To what extent is it ok to use this influence to generate more revenue before it becomes detrimental to the brand’s image?

Here are some pricing strategies that are often used and how they can impact brand reputation:

Price Comparison

“10% cheaper than other supermarkets, or your money back!” is just one variation of a price comparison campaign run on many occasions by the big name supermarkets. It is one of the most commonly used strategies when trying to gain a greater market share or position the brand as a market leader.

Another common use of price comparison is when reducing the price of an item. When items go on sale, brands often list the ‘RRP’ on the ticket, followed by the reduced price. If multiple reductions have been made, these prices may also be listed to increase the perceived ‘value’ of the deal.

In industries where services are on offer rather than products, price comparisons are often drawn using pricing bands or tiers. For example, software solutions commonly offer a basic solution with minimal features (often free or very low priced) and a top tier option with every possible feature (often too many for the average customer’s needs) priced quite highly. They then slip a middle ‘best value’ package in with the main features that the average user needs for a reasonable-looking price. This is called ‘anchor pricing’ and is often very successful when selling services.


This is the art of pricing items as independent rather than as a package.

The most common place we currently see this in action is on budget airlines such as RyanAir. Ever seen a ridiculously cheap flight and been sucked in by the price, only to find it doesn’t include baggage allowance and other necessities? Soon that price creeps up and the flight isn’t the best deal after all.

Budget airlines don’t hide this in their branding; people know they are going for a cheap, no frills flight and may have to pay extra for additional comforts.

However, more prestigious airlines wouldn’t be able to use this pricing strategy as they are chosen by people for their quality of service and offerings. You wouldn’t expect to fly Etihad and have to pay for your standard luggage allowance would you?

Therefore, pricing strategies like these, however transparent, should be used carefully depending on the brand. The way you price can impact the perceived status of the brand, especially if you are trying to target a luxury market.

Dynamic Pricing

Increased pricing during busier buying/usage periods is a great way to boost revenue, but dynamic pricing also has its flaws.

It makes sense that at a period where the product is more in demand, you can charge more for it and boost profits. And yes, people will often pay it. However, it doesn’t project the best image of the brand in terms of trust. It makes the purchase more about the customer’s money than the customer’s needs and doesn’t promote trust.

Flat Pricing

Flat pricing is the opposite idea of dynamic pricing. Whereas dynamic pricing means the price drops significantly during slower periods and increases during busy times (take Uber’s pricing model for example), flat pricing means the rate stays at a middle ground price all the time.

Although with dynamic pricing, you could argue if customers are savvy they can catch a cheap deal, flat pricing gives them more peace of mind. Keeping the rate flat at all times means customers can trust that price and trust the brand. It is simple and transparent; often a recipe for customer loyalty.

When it comes to pricing, the right strategy will depend on your industry, your target customer’s buying behaviours and your brand message. It makes sense that if your target customers are looking for low budget options, the price strategy that allows you to keep the base price low is the best option. However, for more high end brands, it’s less about price and more about quality/experience, therefore different pricing methods will need to be used and potentially some revenue may need to be sacrificed to sustain the brand’s reputation.

What pricing strategy do you use and how does this impact your brand reputation? Please share with us by commenting on this post or tweet us @OXCOM_Marketing.