As we mentioned earlier, there is no cheap or expensive product. For the buyer, all prices are relative. Relative to the first price they saw.
We’ve all seen discounts on goods in stores. The first price — the more expensive one — is crossed out, and the lower price is shown next to it. Subconsciously, it seems like a bargain.
Some brands may use a similar strategy, but before offering a discount, they first inflate the price of the product. Then, they offer a discount on this inflated price, thus increasing their profit even more.
We can also give an example with Apple. When the company introduced the iPad, Steve Jobs first said that a fair price for the device would be $999. And then, unexpectedly for all the viewers, he said that the company had decided to sell the IPad for $499. At that moment, even viewers who had doubts decided that they would definitely buy the iPad.