As we note in our Setting Price: Part 1 tutorial, prestige pricing is a psychological pricing strategy where marketers intentionally sets price extremely high in comparison to competitive products. The idea is that such a high price will create the impression of high quality compared to other products.
If you wonder what that means and would like a clear example of prestige pricing, then this is your lucky day. According to this story from National Public Radio, an Oregon craft brewery is selling one of its beers for $2,000 a bottle! Of course, this is no ordinary beer. It is a special barleywine brew that has been sitting around for 19 years.
If you think the price is outrageous, the story also notes that several people stood in line for two hours to purchase a bottle. Of course, the publicity generated for the company behind this beer is another excellent reason to choose the prestige pricing model.