Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Numerical encoding and odd‐ending prices The effect of a contrast in discount perception

Numerical encoding and odd‐ending prices The effect of a contrast in discount perception The practice of pricing with numbers ending in nine (“nine‐ending”) has been little studied. It now seems well established that, under certain conditions, the practice of such pricing strategies has a particular effect on sales, especially inciting the customer to buy products that are more expensive. The research design for explaining such an effect would depend on the price encoding mechanisms, namely, the emphasis of focusing attention, which decreases when reading from left to right, leading to only partial memorization of the price. This would favour the leftmost digits, thus leading to errors of evaluation or estimation of the starting price. A new experiment was carried out to test this possibility. Subjects had to estimate the discount rate of products in a sale, according to whether the starting price was a “rounded” figure or “odd‐ending”. Assuming the first digit of the price is memorized, we might expect that a round starting price leads to an overestimation of the amount of the offered discount. The results provide evidence in support of this hypothesis, enabling us to gain a more accurate knowledge of the processes used for estimating the starting price. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png European Journal of Marketing Emerald Publishing

Numerical encoding and odd‐ending prices The effect of a contrast in discount perception

Nicolas Guéguen; Patrick Legoherel
European Journal of Marketing , Volume 38 (1/2): 15 – Jan 1, 2004
Download PDF
15 pages

Loading next page...
 
/lp/emerald-publishing/numerical-encoding-and-odd-ending-prices-the-effect-of-a-contrast-in-RAjplzgE1m
Publisher
Emerald Publishing
Copyright
Copyright © 2004 Emerald Group Publishing Limited. All rights reserved.
ISSN
0309-0566
DOI
10.1108/03090560410511186
Publisher site
See Article on Publisher Site

Abstract

The practice of pricing with numbers ending in nine (“nine‐ending”) has been little studied. It now seems well established that, under certain conditions, the practice of such pricing strategies has a particular effect on sales, especially inciting the customer to buy products that are more expensive. The research design for explaining such an effect would depend on the price encoding mechanisms, namely, the emphasis of focusing attention, which decreases when reading from left to right, leading to only partial memorization of the price. This would favour the leftmost digits, thus leading to errors of evaluation or estimation of the starting price. A new experiment was carried out to test this possibility. Subjects had to estimate the discount rate of products in a sale, according to whether the starting price was a “rounded” figure or “odd‐ending”. Assuming the first digit of the price is memorized, we might expect that a round starting price leads to an overestimation of the amount of the offered discount. The results provide evidence in support of this hypothesis, enabling us to gain a more accurate knowledge of the processes used for estimating the starting price.

Journal

European Journal of Marketing – Emerald Publishing

Published: Jan 1, 2004

Keywords: Pricing policy; Individual perception; Consumer behaviour; Memory

References

  • The presence of odd pricing in the Texas State Lottery
    Bartsch, R.; Paton, V.