Psychological Pricing

Only available on StudyMode
  • Download(s) : 820
  • Published : November 9, 2009
Open Document
Text Preview
PSYCHOLOGICAL PRICING: NINE ENDING PRICE
Have you ever though what impact does a price which doesn’t end with a simple round number tend to had on consumers? In 1996, Schindler and Kibarian published an experimental study to test the influence of Nine Ending Price. This experiment was conducted through direct mail of a catalogue of women’s clothing retailer to around 90000 women. All catalogues were identical except for the prices, which ended with 00, 99, and 88. Results showed that nine ending prices led to increase the amount that purchaser spend. This experiment also demonstrated that use of nine pricing can cause more consumer sales than the use of zero-ending price. Further, it showed that it had no effect on the rate of purchasers but had a positive effect on the amount of purchasers spending. It is suggested that fractional pricing was first adopted as a control on employee theft. For cash transactions with a round price, there is a chance that a dishonest cashier will pocket the receipt rather than record the sale. For cash transactions with an odd price, the cashier must make change for the customer. This generally means opening the cash register which creates a record of the sale in the register and reduces the risk of the cashier stealing from the store owner. Today it may be observed that the major retailer Wal-Mart prefers price endings at 99.99 and 99.98, also now a day’s retailer in India like Big Bazaar, Reliance Mart, Brand Factory, etc have accepted this trend. (Source:_ Nine-ending Price and Consumer Behavior: An Evaluation in a New Context .)_
tracking img