What pricing strategy considers customers' perception of a product's value?

The correct answer is psychological pricing, which focuses on how customers perceive the value of a product rather than just the actual cost. This strategy takes advantage of the emotional and psychological aspects of consumer behavior to set prices. For instance, a product priced at $9.99 instead of $10.00 may seem more appealing due to the perception that it is significantly cheaper.

By aligning prices with customers' perceptions of value, businesses can enhance the perceived worth of their products or services, encouraging purchases. This strategy is effective because it recognizes that consumers often make decisions based on perceptions and feelings, rather than strictly with logical calculations of value.

In contrast, promotional pricing is more about temporary discounts to boost sales, price skimming involves setting high initial prices that are lowered over time, and price discrimination is about charging different prices to different segments of the market based on willingness to pay. Each of these approaches does not primarily focus on how customers perceive value, making psychological pricing the most relevant strategy in this context.