Introduction

The language of advertisement nowadays is littered with euphemisms: customer (or my favorite, client) instead of consumer or buyer, "it costs only \$99" rather than "pay us \$100 of your money", etc. As such, I have put all terms that are to be interpreted as euphemisms and not at face value in quotes (ie "this is a great deal!"). Note that the converse is not true.

Pricing Tactics

The 99 cent rule

This seemingly inconsequential method is now so widespread it is plausible to call it a rule or law. For instance, take a look at amazon.com, ebay.com, or any other online store (and when you get the chance, grocery store, gas station, etc). Look for prices that end in .99, 9.xx, or 99.xx (for instance, \$199.00 or \$59.99). It would not be surprising if all the listed ones were of that format. Now consider the effective price of the items, for the previous example \$200.00 and \$60.00 respectively. Doesn't \$1000.00 seem somehow a lot more expensive than \$999.99? I believe this is a subconscious effect. While a thousand dollars is quite a bit, \$999.99 is less than a thousand dollars. The number 999.99 has five significant figures, so if a consumer thinks about the product they are unlikely to immediately remember the actual price, just the fact that it was less than a thousand dollars. A good rule of thumb is to always round the price to one significant figure - that way the price is easy to remember and compare to other products, and any "99 cent" tactics are rendered useless. For the real thrifty consumer, always rounding up (ceiling function) to one significant figure may seem a more natural method (thus \$1400 becomes \$2000).

The Unreasonable Price Tag

This method is two-fold: first, charge an unreasonable price for a product, then decrease the price to a relatively reasonable amount. Now suddenly consumers are more likely to buy the product at the new price than they would have been if that price was introduced as the first option. In order for this to work, it is important to make it very obvious to the consumer what the old unreasonable price was - usually done by crossing out the old price and listing the new low price right next to it. The point is to keep the old price up there, sometimes even in a larger font than the new one, so the consumer is aware of how much they are "saving". Another option is adding "was \$___" or "__% off" or "\$__ savings" somewhere on the price tag. (Note that especially with __% off, the percentage needs to be relative to another (unreasonable) price.) From my experience, the old price at times even precedes the new one - illogical for any reason other than forcing the consumer to read them in order and to really appreciate the "savings". A blatant example (at time of writing) is the ebay daily deals page. Final consideration: if the price is raised, there is no crossed out low price, or "__% higher" message on the tag. Asymmetry indeed.

Only a few dollars

Relatively simple but again more widespread than one might be aware of: all that is done with this method is adding "only" before the price; usually used in combination with the 99 cent rule. For instance "only \$3.99". Another candidate is "just". It is thus implied that price is really low, in fact so low it would have no impact on your budget (or alternatively, that there is no reason not to buy). The "only" is usually put in a way that does not attract attention, such as smaller font or offset from a column for the prices. However, it can be argued to have substantial subconscious impact: I have heard friends and strangers talk about products in conversation, mentioning that they are "only" some price. The way to diminish the effects here is to first become aware of the "only" and then ignore it or think of it with a sarcastic tone.

Number abuse

This is in a way an omnipresent theme, as it happens in advertising ("150% Vitamin C") as well as pricing. This is combined with "sale" tactics to give the greatest impression to the consumer. It would be difficult to argue against having large numbers in savings and low numbers in losses/prices, and that is exactly what companies show in ads. If the price "changes" from \$2.00 to \$1.00 there is not "\$1.00 savings" but "50% savings", yet if it "changes" from \$300.00 to \$250.00 there is "\$50 savings" and not "17% savings" (dollar amount is greater than percentage when initial price >\$100.00). Another abuse factor is "starting at", "from", or "up to" (the last one for savings of course), which usually means the lowest quality product that very few would want to buy, or only available in certain stores, is the lowest price advertised; this is no more than an attention grabbing tactic as there is no tangible information in that price tag other than a lower bound (all prices in the world are "starting at \$0.00").

Overview

After rounding the price to one significant figure, it is important to remember that any seller will charge what is financially profitable - if raising prices will raise profits (low elasticity of demand products) the only way for that product to be on "sale" is with an unreasonable initial price; on the other hand if raising prices will lower profits due to less purchases the company will have absolutely no reason to raise prices. Note the lack of temporal nature here: large companies have near-instant access to purchase statistics and predictions; a product will not be taken off its "sale" price unless it was meant to be there in the first place. There is no "temporary price cut", it is simply a "price cut", or better yet "slightly less unreasonable price". It is wrong to feel that by purchasing a product at "sale" price (or worse, signing up to be in a supposedly exclusive "savers club" or "shoppers club" - this is just a way for the company to get more targeted advertisements and statistics) one is part of an elite group of savers, or a very lucky consumer who purchased the last product to be had at that wonderfully low price. A company will not offer (much less advertise) "deals" and "sales" and "savings" unless they ultimately stand to make significant profits; a consumer looking for true savings will need to spend time doing substantial research to compare prices between different and diverse stores.

Audience Targeting

In one way or another, all of the ads one may see are targeted. They may be targeted by geographic region (billboard or poster for locally available products, usually also based on region/viewer demographics), implied audience interest (car commercials during NASCAR races, beer during American football games), or even known audience interest (gmail ads are matched to keywords from emails written and received by the user, pandora ads are based on profile information and implied demographics by music taste).

Word Abuse / Euphemisms

As implied by the title, this is like number abuse but with words. If it is better to have low prices and high savings, it is certainly better to enjoy desirable luxuries than to waste money on unnecessary stuff. This is particularly rampant in food commercials as there is no real way to convey the taste and quality of the food other than with words. It is essentially a guarantee that a restaurant commercial in audio form will contain one of these words: enjoy, delicious, tasty, great, irresistible, fresh, juicy, crispy, new (every commercial seems to have a new menu item; chefs must be working overtime). "Enjoy" is the one that is most annoying to me, as I noticed myself using it in relation to foods/drinks :(

Pavlov's Dogs

A clever trick in commercials is to act acquainted with the viewer, personally or emotionally, in order to gain trust and incite the consumer to action (to buy stuff). In the short span of a single commercial this is most efficiently done by immediately invoking second-person ("you will enjoy.." oh really? is that a command or a legal guarantee? who are you to say that as if you know my tastes?) or even first-person tone. Pay attention to background music in ads that contain audio, as it is likely to have lyrics in the first person: "UPS brings to me", "I'm loving it" - memorizing the lyrics, even subconsciously, and singing them back means now you are saying to yourself that you want the product. Simply hearing the same tune without the lyrics present can evoke that response (if there are no words playing along with the tune the brain will add the known words in to match the first remembered commercial); it is like Pavlov's dogs. This approach is generally awkward to carry out without music as the lyrics in a song tend to mask the fact that the phrases are in first person. Sometimes an actor describes "what happened to me" which may incur emotional sympathy (effective in health and insurance-related ads; general fear mongering) but this does not come close to the subconscious effect a catchy tune has.

The English language has as one of the features no distinction between a formal "you" (to adress elders or important people) and an informal "you" as would be used with friends and children (Russian and Spanish, among other languages, do). Additionally, there is no distinction between formal, informal, or generic commands (again as is in Russian and Spanish and others). Thus "save \$25" can be interpreted as a general statement that should say "our products are \$25 lower" (than what?), but can be seen as a command - "buy this and save \$25", "come to __ today for a fresh tasty meal". I believe this has a subconscious effect; again it is important to recognize the command interpretation and not follow their instructions unless purchasing the advertised product is one's own decision.

Lack of Detail

Many commercials now strive to show how "cool" and "desirable" and "extremely low price that you don't want to miss" the advertised products are but give no information about the actual functionality. What is the quality of the product at such a low cost? For me this is most evident when purchasing electronic devices, as I am usually aware of the features I desire in the product but have no way of confirming them online or in a store (what is the frequency response of the default Apple earphones? Note that it is listed for the higher-quality "in-ear headphones" but not for this product). Food commercials really have no choice but to do this, as it is impossible to convey taste over current media, they could show nutritional info or ingredients but rather they show people enjoying eating food, or farmers growing the food (watch Food, Inc for debunking this one) etc.

Deals

The word "deal" itself at least historically conveyed trust ("I made a deal with him, and he is obligated to keep to it") but now is used as another flashy word for "sale"; again the alternative definitions of words are important to recognize as they have a subconscious effect. If one hears of "a great deal" one may get a sense of the seller's honesty in extending this "deal" to the consumer. It is in fact promoted only because it will raise money for the seller; true savings, if they exist, need to be found with substantial effort and will not be served to the consumer in an advertisement.

Attention Grabbing

Advertisements compete for the viewer's attention, so anything that can be done to get the attention (if the product name does not, that is) will be done. This includes raised volume levels in TV ads and bright flashy colors along with banners and large fonts in print media. Be aware of uses of subconscious images and text layout - for instance if text is tilted it tends to be tilted upwards (~10 degree angle from normal) if reading from left to right, because a downward tilt is generally associated with something unfavorable (as in graphing a downward curve to represent losses over time).

Sale Tactics

Bundles

This may include "free shipping for orders over \$__", or "buy 2 for 25% saving". If one's initial desire was to purchase 2 of the product, or everything already in the bundle, one stands to have relative savings - otherwise it is only the company that benefits and one has succumbed to impulsive shopping - the one biggest wish of the advertising industry.

Savers Club

While this may in fact generate relative savings for the consumer, it is far outweighed by the statistics that the company can gather (it already knows what products are sold, but with a savers club it knows how often customers go to the store and what products are popular by geographical areas and even other factors). In addition, this is a technique of price discrimination - someone with "big bucks" will not join a savers club because of the hassle, thus the people who do join are obviously interested in savings, and by implication products that are on sale for the savers club are likely to get noticed and bought by members of that club (even if they are lower quality than others - again because the people in the club are obviously interested in saving money). This is in effect a guarantee that the discounted products will be bought.

Credit Cards and Lease

Selling a product on lease, as is often done in the automotive industry, may give many advantages to the company. First, it allows the listing of a very low down payment or recurring payment charge in an advertisement - a luxury car may have a listed price of \$799 but this is only to get the lease (also notice there is no reference to how many months one will have to pay the lease - need to read the fine print for ads that use this). Getting a credit card for "exclusive savings" is a similar tactic - this one is sometimes advertised at time of purchase with a "\$10 off this purchase if you sign up for ___" type offer (remember that the money rebate is one-time while the agreement you make is indefinite). With both of these approaches, the company stands to make significant profits through interest on the lease or on credit card charges/fees, otherwise (with no interest) the lease would not be offered other than out of goodwill or more likely a real need to sell amidst low demand without lowering the actual price.

Initial Price

For selling services specifically, a rather dishonest tactic but one that is used even by large companies is to set a low and cozy introductory price (even free), then after a certain period automatically raise that to a full price assuming implied agreement to said price. This may be taken advantage of by getting out of the service before the automatic enrollment date - however, the procedure to do so is likely to be exceedingly difficult and time-consuming and the company will accidentally enroll the consumer earlier etc. Effectively, one is purchasing the service at full price since the introductory price is only for a limited time while the full price is as long as the service is used. If used in advertisements, this price will be usually qualified with "starting at", "first month for", "limited time" or the like; be sure to read the fine print and all asterisk footnotes. This tactic is very popular with scam and otherwise not particularly reputable sources (search for acai weight loss or such), which depend on the consumer forgetting about starting the program (for free, usually) and then charging outrageous fees.

Fun things to try

How much do they know?

Find extensive technical details on an electronic gadget. Do not use a seller's website but general statistics that determine the product one might consider purchasing, and go beyond the basics. For instance, a sound system that supports S/PDIF fiber (optical) input, or a portable hard drive with Cat 5e cable connection and SSL support to access files over a network. Really research the specifications and what they mean, then find a matching product online. Then go to a physical store and ask a "sales representative" to help you find the item per the technical specifications; see how much they actually know, and what product they offer. To take it further, tell them there is a cheaper product which you have found online (if there actually is one) and you might get the product for the online price. It is not unfair to do this experiment, because the "representatives" are employees of a technical store or the electronics section of a larger store and thus should know exactly the specifications of the products sold there, not just the prices.