Many diners hesitate ordering dessert. They feel full from having just completed their meal. They know desserts are a danger to diets. But if truth be told, they're hankering for dessert to the point of looking for an excuse to order it. Here's where the fixed price menu comes in. As research at Northwestern University confirms, consumers are more likely to purchase certain types of items when presented with a group of similar alternatives all at the same price. The reason is that parity pricing—which is what this is called—eases the decision process.
This technique is used with much more than desserts. Although the price fixe menu with alternatives for each course is more common in Europe than in North America, price fixe in the form of parity pricing is seen in at least a few restaurants everywhere you go in the world. What's of more use to you, though, for what you sell beyond restaurant menu items is that parity pricing significantly facilitates sales of many sorts of products and services.
But only under specific circumstances. Parity pricing is most effective as a selling technique with items where the prospective buyer considers the purchase to be particularly risky. That might be because the buyer believes the price to be high, which involves financial risk.
However, if the purchaser is aiming to get a distinctively expensive item—such as to show off to others or to feel indulgent—parity pricing can be downright frustrating. In the current retailing environment, where frugality is honored over frivolity and shoppers hesitate spending money, parity pricing could help ease your shoppers' indecisiveness.
For your profitability: Sell Well: What Really Moves Your Shoppers
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