According to William Dillon ( as quoted by Tibbetts, 2003) “Typically, one looks at the market share of the brand and the price premium that the brand commands,” Psychological pricing and brand name are both marketing tool to attract customers and increase sales. A brand name can be used to identify a commercial product or service by profit and nonprofit entities, political and religious organizations, industry and agriculture, manufacturers and producers, wholesalers and retailers, sole proprietorships and joint ventures, partnerships and corporations.
This is the customer’s first contact with the company and its product. It is important that the name has a name recalling factor in order to be effective marketing tool. Psychological pricing is markets based approach that businesses uses to attract consumer. This method is designed to encourage purchases that are based on emotional rather than rational responses The prices on product and services where reduced to increase sales.
One of the best example of this kind of pricing is odd pricing. Under this pricing strategy prices of the product are set at uneven amount. Cars are prices at $ 13,995 rather that $14,000. (Etzel et. al, 1997) The right choices of brand name and application of applicable psychological pricing can help the company increase its sales and revenue. One of the best example of this is McDonalds. The company has chosen a brand name that has a very good name recall especially to children.
Research demonstrates that general brand impressions heavily favor the dominant brand in a category. Together with the use of odd pricing approach, Mc Donald’s company has become a successful leading fast food chain around the world. Developing the right brand and implementing the right choice of psychological pricing for your target market can help a company increase its revenue and sales.