Entrepreneurs might choose prestige pricing for several reasons:
Brand Differentiation: High prices can help differentiate a brand from its competitors, signaling that the product or service is of higher quality. Targeting a Specific Market: This strategy is effective for targeting affluent customers who associate higher prices with higher value. Increased Profit Margins: Higher prices can lead to higher profit margins, which can be reinvested into the business for growth and development. Perceived Value: Consumers often perceive expensive items as more valuable, which can enhance their overall experience and satisfaction.