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Integrating Pricing Decoys into Your Product Line Strategy

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    Many people who visit online websites don’t know what to buy. They make purchases after checking various options like quality, features, customer reviews, and, of course, prices. The cost of the product decides if they want to buy a product or not. So, why not use this information in your pricing strategy and offer a decoy product?

    The decoy pricing method persuades customers to spend more money or purchase a specific product by providing fake alternatives to compare against. They believe they chose the best-value product, but their selection was influenced. For example, when McDonald’s offers small fries with a burger, it means customers have encountered decoy pricing. Let’s go through this blog and check out what decoy pricing is, ways to employ decoy pricing, how it works, and strategies to integrate decoy pricing. 

    What Is Decoy Pricing?

    When a company shows multiple different prices to its customers in an attempt to direct them toward a specific product or service, it is known as decoy pricing or target. Providing a little less attractive product is known as the decoy, and the target appears more appealing. This pricing method is based on your customer’s psychological tendency to ignore things or services that they check as inferior or poor in value. A decoy pricing method is planned to influence how its customers perceive their available options. Many businesses rely on the decoy effect to persuade clients that the higher-priced and more profitable product represents the best value.

    What Are Ways to Employ Decoy Pricing?

    Here are several methods of using decoy pricing that may help your company to increase sales:

    Tiered Pricing

    Products are classified into grades or grades based on their features or functions. You can make your product more attractive by showing that it offers additional features for its price. For example, you have three items.

    • Phone 1 is $30 and has two features.
    • Phone 2 is $45 and has four features.
    • Phone 3 is $55 and has seven features.

    Phone 3 has three additional features than Phone 2 and costs $15 more. The decoy is Phone 2. Its purpose is to offer Phone 3 the impression that it is more valuable and therefore worth the higher price.


    Bundling means you target products with something else customers consider valuable while setting the decoy as the less appealing option. Assume you’re an online gym products retailer. You advertise the following products:

    • The cost of the gym shirt is $35.
    • The cost of a branded gym shirt is $70.
    • Then there is a package deal: brand-name shirt and boxing gloves for $90

    The gloves usually sell for $35. The branded shirt serves as a decoy. The attraction effect makes the high-priced package deal look tempting, which will make your customers spend more money overall.

    Charm Pricing

    Charm prices are based on the customer’s desire to consider a price slightly below a round figure as more tempting, like they are more likely to purchase a product of $19.99 rather than $20. 

    How Decoy Pricing Works

    Decoy pricing is effective for businesses because it influences the psychological and mental perceptions of a product’s worth and value. Here are a few methods that change customers’ minds and make them buy the product without thinking too much.

    Cognitive Bias

    Many buyers don’t know what they want. They just make purchases based on context. Offering two products together can have a significant impact on buyer behavior. When you offer a customer more than two options, it means you are using a cognitive bias method. It appears that they have begun to differentiate between the downsides and advantages of things more clearly. You can offer decoy pricing to customers:

    • A cheap and low-quality item.
    • A pricey and high-quality product.
    • A medium-quality product at a slightly lower price than the pricey one.

    A buyer is encouraged to make a purchase because one product is more reasonably priced or of higher quality than other things on the shelves. A decoy product helps to reach these findings by providing more context for comparison.

    Compromise Effect

    The compromise effect is based on the reality that buyers frequently prefer medium-sized products over large ones. When you give them a choice between three products, people prefer not to buy the cheapest one because they assume it is of worse quality than the other two. At the same time, the most expensive product may appear to be expensive or include features that consumers do not require.

    As a result, customers will choose the third, which is the middle option. They find it the best price/quality ratio. Decoy pricing is effective when one product is really inexpensive and another is expensive, which makes the middle product more appealing. 

    Attraction Effect

    The attraction effect is also known as asymmetric dominance. It means to make one product more appealing than another. Most businesses use it because everyone wants to get a good deal. When given a choice between two products, many customers will choose the lower-priced one. However, when the middle option comes, customers will be attracted to it. They will purchase the expensive product because it has more value than the less expensive product and is less costly than the most expensive one.

    For example, with Netflix, people are more likely to purchase a standard subscription for $15.49 per month rather than purchase a standard with ads for 6.99 and a premium for 22.99. This is because standard offers almost all options as premium and more options than standard with ads. Most people will choose the standard option because it offers ad-free movies, and they can watch and download them on 2 supported devices. On the other hand, the standard option has ads and supports watching and downloading only on 2 devices, while the premium option has 4 devices that can download and watch without ads. Many people might not need the 4-device option, so they will go for a standard. Because in this option, they get the ad-less option with downloading and watching for two people. 


    Although decoy pricing is not fully beneficial to all businesses in terms of attracting customers, it can be an effective method for promoting a certain product. By following the steps outlined above, you can create a strategy that encourages website visitors to understand the value of your product and place orders without hesitation. Large businesses, such as Amazon and Flipkart, have used this strategy for decades, and it may work for your company as well.

    You can also use some strategies like choosing the perfect product for price decoying, then do some research about how your competitors apply it in their business. You can show the features and uniqueness of your product and inform your customers why it has a higher price. You can apply pricing decoy by making it a bit less than others and attract customers to buy your product. After that, you can check if your strategy is successful or not. You should know that every strategy has its pros and cons, and so does decoy pricing. 

    Decoy pricing can help you to get the attention of customers, speed up and change customers’ decisions to buy your products, and increase sales. However, it does not always attract the audience, and it may backfire on you, so you should test the pricing first. It can also lead to customer dissatisfaction because they might have felt your prices are too high or low according to products offered by your competitors. So, learn about it and then apply it to your business. Visit for cutting-edge tools and solutions.



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