Have you ever wondered why some prices just feel “right”? According to Professor Dr. Kai-Markus Mueller there’s a whole science behind it, and it’s not what you think!
Is Trial and Error a Pricing Nightmare?
Businesses spend countless hours guessing the right price for their products. Neuropricing takes the guesswork out by leveraging the power of neuroscience to understand how consumers perceive value. It bridges the chasm between what consumers say and what they actually buy, providing invaluable insights into setting precise pricing benchmarks.
This translates to:
- Targeted Pricing: Reach the perfect audience segment willing to pay the most.
- Feature Optimisation: Identify features that resonate most with your target market.
- Unconscious Bias Detection: Uncover hidden factors influencing buying decisions.
Beyond Price Perception: Predicting Market Shifts
Neuropricing isn’t just about setting the right price today. It can also predict how the market will react to future changes. “Neuropricing doesn’t just measure perceived value, but it also predicts how the market will change.” Imagine knowing exactly how a price hike will impact sales before you implement it! Here’s a real-world example:
PepsiCo Case Study: When PepsiCo pondered raising chip prices in Turkey, Neuropricing predicted a 9% revenue loss, compared to a much higher 33% predicted by traditional methods. The actual loss? A remarkable 7%, much closer to the brain scan’s prediction.
B2B Applications: Beyond Consumer Products
Don’t think neuropricing is just for physical goods! Businesses of all sizes can leverage this approach. Take this example:
Insurance Pricing Challenge: A financial services firm wanted to raise insurance premiums above €100. While consumer brain scans indicated a price increase was possible, salesperson perception limited the actual increase. This highlights the internal biases that can skew pricing decisions.
The “70% Off Nutella Frenzy”: When Discounts Hijack Our Brains
We’ve all seen the madness of massive discount sales. Neuropricing explains the science behind this phenomenon.The nucleus accumbens, a pleasure center in the brain, plays a pivotal role. When the pleasure of liking a product surpasses the pain of its price, consumers are primed for purchase, akin to a drug-induced euphoria. This can lead to impulsive purchases that don’t reflect actual needs.
Listen to full conversation between Professor Kai & Jasravee Kaur Chandra on our YouTube Channel
Jagged with Jasravee, the Marketing Show 
Leave a comment