Price Magic Strategy: ₹10 Biscuit Example

Price Magic Strategy: ₹10 Biscuit Example 🍪✨

Scenario:
• Original retail price: ₹10 (inclusive of 18% GST → net price ₹8.47)
• GST reduced from 18% → 5% → new retail price if benefit fully passed to consumer = ₹8.90

Instead of simply lowering the price, a brand can apply Price Magic to delight consumers and protect margins:

1️⃣ Keep Price Stable, Add Value
• Retail price remains ₹10
• Increase quantity slightly (e.g., 9 biscuits instead of 8)
• Effect: Consumers feel they are getting more for the same price, creating perceived value. 🎁

2️⃣ Slight Price Reduction
• Reduce price modestly (e.g., ₹9.50)
• Effect: Consumers notice the savings and feel rewarded by the GST reduction, while margins remain manageable. 💸

3️⃣ Bundling or Combo Offers
• Example: “Buy 2 packs for ₹18”
• Effect: Creates a sense of value, encourages multiple purchases, and absorbs GST reduction strategically. 🛒

Key Takeaways:
• Price Magic combines strategy, psychology, and tax awareness 🧠💡
• Small adjustments in price, quantity, or bundles can make even low-cost items feel more valuable ✨
• GST reductions are opportunities to enhance perceived value without hurting margins 💰

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