Latest / Pricing Power Podcast with Fexingo: How Businesses Set Prices, Raise Margins, and Win Customers
The Psychology of Decoy Pricing in Retail
We dissect how the decoy effect manipulates consumer choice using a concrete example from a major coffee chain’s size strategy. Lucas and Luna explore why adding a mid-tier option isn’t just about volume—it’s about steering customers toward the highest-margin item. We break down the math behind the 'Goldilocks' pricing model, look at real-world applications in software tiers and subscription services, and discuss when this tactic backfires. If you’re setting prices for your own products or evaluating market trends in October 2026, understanding this psychological lever is essential…
The skinny
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