But more often than not it's consumer behavior that drives price, not a desire by business owners' to pick pockets. Take, for example, tuna. Most consumers assume that buying in bulk is cost-effective and that bigger, ultimately, is cheaper. But a study presented at Fordham University's second annual Behavioral Pricing Conference showed that smaller cans of tuna often are a better deal. They are getting a better deal on the smaller cans because the larger cans are more popular.
Pricing has the biggest impact on profitability and is the most difficult part of marketing.
This is the only conference in the country that looks at behavioral pricing. This year's conference honored Kent B. Monroe, whose 30 years of experience demonstrate that buyers' price evaluations are often affected, and sometimes biased, by seemingly irrational and emotional influences and are rarely attributed to price alone. Professors from around the country and overseas presented papers honoring Monroe's work by reporting groundbreaking research on consumer price perception formation and behavioral responses to price. Monroe said the future of price perception lies in a better understanding of how people process numbers and what is in their mind when they consider prices. We need to distinguish whether their knowledge is implicit or explicit, whether they process different numbers differently and how this effects behavior.