I’m reading a book by Dan Ariely called Predictably Irrational - well worth a read. I’m only a couple of chapters in but already I am raring to go on a marketing experiment about pricing.

In the book Dan talks about how people need at least two products to gauge a price. The example he uses, to great effect, is for magazine subscription with three options:

• 12 months Internet only - £59
• 12 months print only - £165
• 12 months print and Internet - £165

He ran an experiment to see which option people would go for and most went for the third option (84%), because they had two points of reference. By repeating the same experiment but removing option two, this came down to 32%.

His visual demonstration of this phenomena works well also:

Like I said, well worth a read.