Tourism Management Certificate (TMC) Practice Exam

What pricing strategy is being utilized when theme park tickets are priced at $89.95?

1. Dynamic pricing

2. Skimming pricing

3. Psychological pricing

4. Competitive pricing

The correct answer is: Psychological pricing

Psychological pricing is a strategy where prices are set in a way that makes them seem more appealing to consumers, often by using pricing that ends in .95 or .99. In the case of theme park tickets being priced at $89.95, the specific use of the ".95" ending likely aims to create a perception that the ticket is a better deal, making it feel less than $90 in the minds of potential buyers. This tactic leverages consumers' psychological tendencies to perceive prices ending in these digits as more favorable or as deals, even when the difference is minimal. It encourages spending in a retail environment, especially in entertainment sectors like theme parks, where experiences are often perceived to be worth the cost. Other strategies, such as dynamic pricing, skimming pricing, and competitive pricing, involve different considerations and approaches and do not rely as heavily on psychological factors related to price perception. Dynamic pricing would suggest that prices change based on demand or supply conditions, skimming pricing would involve setting high initial prices for new and innovative products before lowering them, and competitive pricing is about setting prices based on competitor prices. The pricing strategy used here focuses on how consumers perceive the price rather than market forces or competition.