Consumer Preferences for 99-ending prices: the mediating role of price consciousness
AbstractThis research addresses the persuasive effect of 99-ending prices and carries out a choice-based conjoint analysis among 318 shoppers. We propose that 99-ending prone consumers engage in a heuristic process either consciously — they consider a 99-ending as a signal for a “good deal”— or unconsciously — they round down 99-ending prices. This conceptual framework leads to non-intuitive and completely new sets of hypotheses in the examination of the drivers, mediator and moderators of 99-ending preferences. Results indicate that consumers who are more price conscious are more likely to choose 99-ending prices. Indeed, low involved shoppers (especially those with a low hedonic and symbolic involvement profile), low educated, low income and younger shoppers are prone to choose the 99-ending option. We also demonstrate that the magnitude of this 99-ending effect depends on the price level of the product category and the positioning of the brands. The theoretical contributions to the manner in which consumers process 99-endings has implications for retailers, pricing managers and social welfare
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Bibliographic InfoPaper provided by Universidad Carlos III, Departamento de Economía de la Empresa in its series Business Economics Working Papers with number wb110503.
Date of creation: Apr 2011
Date of revision:
99-ending prices; Price information processing; Conjoint analysis;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-23 (All new papers)
- NEP-CBE-2011-04-23 (Cognitive & Behavioural Economics)
- NEP-HME-2011-04-23 (Heterodox Microeconomics)
- NEP-IND-2011-04-23 (Industrial Organization)
- NEP-MKT-2011-04-23 (Marketing)
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