Anchor price is a price to which customers may compare the other price while making a purchase.
For example, if a product is at sale at $100 from a previous price of $120, then $120 is known as the anchor price.
This strategy is referred to as price anchoring.
Price anchoring can work in two ways. They are:
1. High price anchor: You price a slightly premium product higher than the price of actual product that you want your consumers to buy.
2. Low price anchor: Pricing your product higher than what a basic product is offering, so the consumer thinks that they are gaining something for the extra price being paid.