Question

General mills offers three sizes of its popular cereal cheerios: 10-, 14-, and 18-ounce boxes, and they are priced at approximately $2.99, $3.99, and $4.49, respectively. the company employs this tactic to

Answer 1

General Mills sold three sizes of cereal cheerios at $2.99, $3.99, and $4.49 each. Selling tactic used by the company is psychology pricing. General Mills used this technique to encourage customers to respond on emotional levels rather than logical ones.

Setting the price of the cereal at $2.99 is proven to attract more consumers than setting it at $3.00, even though the difference is only $.01. Consumers are said to put more attention on the first number on a price tag than the last.