The Lawson family was discussing purchasing a new television. Larry mentioned that he’d seen an ad from Ates Appliances pricing the model he liked at $899 and that his neighbor had paid about that same price for his. Lila replied, “$899! The last one we bought was less than $400 and since they’re all made in China, I can’t imagine that prices are so high! I’d think that something between $500 and 600 would be more like it.”
Lonnie piped up, “At that price you’d be getting excellent quality and all the latest technology.”
Leta had a television set in her room. “I can’t see why we’d spend that kind of money for a television when we should be saving towards my college!” Linda added her opinion, “You know Ates is going out of business; they should be really dropping prices as their time runs out.
The Lawsons all had opinions on what the price should be for their new television set. All their opinions reflected different pricing psychology effects – internal reference prices, external reference prices, perception of value, expectation of future prices, range of price acceptability, motivation of the seller, and price as a proxy for quality. Can you identify who used what?
