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Originally Posted by Barcey
If the price is much higher then people expect to pay it's viewed as gouging or an insult. Everyone has their own level but you don't want to alienate the majority of your customers.
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I do not get this. It is a price I am not willing to pay but why is it an insult?
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If a bakery put a price of $20 on a loaf of bread because it just came out of the oven would you pay? If they told you it would be $8 if you came back in 4 hours and $3 if you came back in 12 hours would you go back? I wouldn't.
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I might or I might not. But I would probably go to another place that had 12 hours old bread when I was in the shop.
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Pricing is about understanding the market and what people are willing to pay. It's not about "educating the public that the price has to be higher".
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Educating? I thought pricing was to set a price that maximises the profit. And that point is not necessarily the point where most people is willing to buy.