«Eigentlich» Column: When Prices Are Formed in Our Minds—and Why That Matters Right Now
At first glance, prices seem like mere calculations—set in Excel, derived from costs and margins. But in reality, they only take effect in the minds of customers, write Philipp Fessler and Klaus Ammon in their new m&k column «Eigentlich.» In times of growing price sensitivity, one thing becomes particularly clear: what matters is not only how a price is determined, but how it is perceived.
Prices have always been important. But rarely have they been as much in the spotlight as they are today. Many Swiss households are keeping a closer eye on their spending, comparing prices more carefully, and postponing purchase decisions. Consumer sentiment in the spring of 2026 was well below the long-term average¹. At the same time, numerous consumers indicated in surveys that they wanted to reduce their spending².
This increases the pressure on companies. Higher costs cannot simply be passed on, because price increases are being viewed with increasing skepticism. Discounts are losing their element of surprise and are now expected. Growth is becoming less and less a given. It is precisely during such phases that a widespread misunderstanding becomes apparent: Many companies treat Prices Pricing is primarily seen as a mathematical problem. However, customers perceive prices as a signal. Successful pricing is therefore based not on numbers, but on customers’ willingness to pay.
The price is never just the price
A price rarely stands on its own. It conveys messages: high quality, fair, risky, affordable, cheap, or unnecessarily expensive. The same amount can come across completely differently depending on the context. 49 francs for a T-shirt seems high to many people. 49 francs for a skincare product may seem reasonable. 49 francs for a software subscription is often accepted if it saves time. Willingness to pay is also frequently situational—it’s higher for a Coke at a gas station convenience store than at a supermarket. Prices aren’t judged in absolute terms. They’re interpreted.
Perception is often stronger than reality
Research conducted by the University of St. Gallen showed that price differences with neighboring countries are sometimes significantly overestimated³. This is revealing. It is not only actual prices that influence behavior—perceptions of prices, i.e., price image, are also relevant to price perception.
Most purchasing decisions are made more quickly and on a more emotional basis than we’d like to believe. Only afterward do we try to justify the purchase with rational arguments. Often, a feeling comes first: desire, security, trust, relief, recognition—or even the desire to avoid a (perceived) loss.
Methods such as conjoint analysis can be used to measure which combinations of price, performance, brand, or service are actually preferred—and what consumers are actually willing to pay more for. Implicit methods also help identify what people do not always say directly or strategically conceal. This often reveals that it is not the lowest price that wins, but rather the most coherent overall package.
The Major Misconception Behind Many Pricing Strategies
In many companies, pricing is still discussed primarily internally: margins, competition, leeway, promotions. The real question, however, is: How does the customer perceive this price?
What companies can learn from this: If you want to set prices more effectively, you shouldn’t just crunch numbers—you need to understand the market. Pricing isn’t just about numbers. It’s an intense focus on market understanding and market communication.
The price is often printed in small print on the packaging, in the store, or in the offer. Yet it has a big impact.
If you just calculate pricing, all you see are numbers.
Those who understand pricing can predict behavior.
… Actually People rarely make decisions based solely on price. They make decisions based on the feeling that a price evokes.
Philipp Fessler Klaus Ammon and I have a combined total of more than 50 years of experience in consumer research and marketing research. During this time, we have seen many pricing methods emerge—and some disappear again. What has remained is the conviction that good pricing research never ends with numbers. After all, prices have not only a mathematical impact but also an emotional one. What matters, therefore, is not only what people can afford to pay, but also what feels right, fair, or valuable to them. Management Tools has been working precisely at this intersection of data, perception, and behavior for many years.
Sources
- SECO / State Secretariat for Economic Affairs, Swiss Consumer Sentiment, Spring 2026.
- Swiss surveys on savings intentions for late 2025 / early 2026.
- University of St. Gallen, Studies on Shopping Tourism and Price Perception
Switzerland/Abroad
- 2026 Consumption & Savings Monitor by sda awp in cooperation with management tools, December 2025: https://www.presseportal.ch/de/pm/100103209/100937386
