Chapter 11 - Step 7.2 Price: Determining Incentives and Discentives

What is the Price of the product?

This is the cost associated with adopting the behavior

What are monetary costs?

These are tangible costs (Ex. Cost of Goods: COVID-19 home tests, Cost of Services: Taxi rides home from a bar)

What are Nonmonetary costs?

• Costs associated with the time, effort, and energy.

• Psychological risks and losses

• Physical discomforts related to the behavior

What are the 6 price-related tactics?

1) Increase monetary benefits for the desired behavior.

2) Increase nonmonetary benefits for the desired behavior.

3) Decrease monetary costs for the desired behavior.

4) Decrease nonmonetary costs for the desired behavior.

5) Increase monetary costs for the competing behavior.

6) Increase nonmonetary costs for the competing behavior.

What is true about the price-related tactics?

4 of the 6 price-related tactics focus on the desired behavior, while the other two focuses on the behavior of the competitors

What is the price related tactic of Increase monetary benefits for the desired behavior?

Essentially, try to increase the nature of rewards and incentives for the desired behavior

What is the price related tactic of Increase non-monetary benefits for the desired behavior?

Essentially, try to increase the nature of benefits, such as pledge/commitment, recognition, and appreciation, psychological and personal in nature, etc.

What is the price related tactic of Decrease monetary costs for the desired behavior?

Essentially, try to decrease price-related costs for the desired behavior by implementing coupons, gift cards, trial incentives, cash discounts, promotional pricing, etc.

What is the price related tactic of Decrease non-monetary costs for the desired behavior?

Essentially, try to decrease the time, effort, physical, or psychological costs of adopting the desired behavior, by delivering psychological rewards, gathering endorsements from credible sources, providing reassuring information, soliciting seals of approval, etc.

What is the price related tactic of Increase monetary costs for the competing behaviors?

Essentially, try to increase monetary costs for competing behaviors to dissuade your target audience in participating in them, by increasing taxes, imposing fines, or decrease funding by influencing policymakers.

What is the price related tactic of Increase non-monetary costs for the competing behaviors?

Essentially, try to increase non-monetary costs for competing behaviors by emphasizing negative public recognition.

What is a Pledge and Commitment and what does it do?

Pledge is the actual signing of a form, while commitment is the action expressed by the pledge and brings value to adopting a desired behavior. There are various forms of commitments such as verbal, written, public, and durable.

Who sets the price for tangible goods and services?

Often by manufacturers, retailers, and service providers; we give suggestions on appropriate goods and services, discount coupons and related incentives.

What are the 3 principles to guide decision making?

• Cost-based pricing

• Competitive-based pricing

• Value-based pricing

What are some ethical considerations for pricing strategies?

• Social equity: interventions should not disproportionately favor certain groups while disadvantaging others.

• Potential exploitation: take advantage of vulnerable populations.

• Public shame tactics: using social pressure or stigma to influence behavior change.

• Full disclosure of costs: transparency about all potential consequences of an intervention, including financial, social, or psychological costs.