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The Principle of Relativity in Marketing

With three price options, 59$ for an online subscription, 125$ for a print subscription, or 125$ for online and print, The Economist convinces customers to purchase the third option. This strategy uses more than two alternatives, generally three, to create price relativity in the consumer’s mind. In the case of a subscription to The Economist, the 125$ option for print and digital access is a better opportunity than 125$ for just print access. Thus, consumers interested in the best deal would likely see the former offer as a bargain. Overall, decoy pricing is applied by the marketing specialists, as 125$ option for print and digital access appears to be the more superior choice than 125$ for just print access.

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The principle of relativity is not the only marketing tool used in the context of the Economist offer. A study done in both China and the United States found that price increases at times enhanced the consumers’ enjoyment or satisfaction with the purchase (Gao, Zhang, & Mittal, 2017). Furthermore, a higher price can make consumers associate the product with higher quality. For example, the concert tour for The Eagles, after a 14-year hiatus, was priced at 100$ a ticket. The price cemented the idea in fans’ minds that this tour was a chance to see “the greatest American rock-and-roll band” (Mohammed, 2017). The price worked symbiotically with a demand to justify the seemingly high cost of tickets in the consumers’ minds. In the case of The Economist, the price of 125$ is justified for consumers who perceive this price as a mark of quality.

The Principle of Relativity

The principle of relativity implies that customers pursue the cost and value of various goods by comparing multiple products on the market and evaluating sale prices. Thus, the consumer can fully assess the value of one commodity or discount based on how it differs from the other similar items in the economy. Additionally, buyers evaluate whether the good is worth buying based on the original price before sale. Therefore, to appropriately calculate the most efficient pricing, companies use various techniques that imply the principle of relativity in practice. For example, the method of comparative pricing is considered by some to be “the most effective psychological pricing strategy” (Boachie, 2016). The tactic requires producers to offer two comparable products simultaneously and present one of them as superior. This method allows customers to choose between products that have similar features but drastically different prices. Therefore, marketing techniques lead consumers to choose a particular item that is expected to be sold by a business.

Another way marketing specialists apply the principle of relativity is by emphasizing different prices of one product. This is done by presenting a sale through the graphic depiction of the previous commodity price side by the new one. This technique allows companies to sell more products by giving their customers the idea that they are getting value for money because of the psychological effect of a relativity principle. Businesses should draw attention to new prices by making them visually distinct through vibrant colors, font sizes, and more. However, it is essential not to underprice a product because it will negatively affect the company’s bottom line (Wasserman, n.d.). Therefore, the strategic use of relative principle is critical while selling a product; however, marketing professionals need to calculate prices effectively in order not to harm the producers.


Boachie, P. (2016). 5 strategies of ‘psychological pricing‘. Entrepreneur.

Gao, H., Zhang, Y., & Vikas, M. (2017). How does local-global identity affect price sensitivity? Journal of Marketing, 81(3), 62-70.

Mohammed, R. (2017). The psychology behind the new iPhone’s four-digit price. Harvard Business Review.

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Wasserman, E. (n.d.). How to price your products. Inc.

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