Leigh Caldwell is an expert in pricing and behavioral economics. He wrote an engaging book titled “The Psychology of Price” . Book only talks about how to set price for a product and how to manage it. The book has 19 chapters in it and right from the first chapter, the author explains various aspects of pricing using a story of “Chocolate tea-cup” product made by Maggie. Even though the story is fictional the lessons are real.
Beginning of the book starts with how the product can positioned using price elements and then followed by basic economics about pricing a product. Later chapters talks about how to set pricing using behavioral economics principle. The content is lucid, interesting and engaging. Each chapter includes a section on how to apply, a template to be used by entrepreneurs and a summary of the chapter. Hence the book gives a comprehensive guide setting price.
Specialty of the book lies in using behavioral economic theory in practice. One chapter talks about Anchoring effect in pricing, where the author says the initial price you set for the product is the base value for customers hence an entrepreneur should choose their launch price wisely.
The book has 8 case study and 9 In focus articles on pricing to treat the reader. Even though the title is catchy the author doesn’t talk much about the psychological effects of pricing using peer-reviewed journal. We don’t know, he may have thought to make it simple for everyone to read. Some chapters are assumed to work in the real environment. For example, like Chocolate Tea Cup(CTC) will aim to give charity for each cup the customer buys. Here the author exaggerated the sales of CTC, just because it spends part of the profit to charity.
Yet the book is engaging, informative, provides the template for entrepreneurs. The book is must read for marketing managers, marketing professors, entrepreneurs, and start-up companies.