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The influence of price endings on consumer behaviour: an application of the psychology of perception

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  • Emmanuel Selase Asamoah

    (Ústav managementu a marketingu, Fakulta managementu a ekonomiky, Univerzita Tomáše Bati ve Zlíně, Mostní 5139, 760 01, Zlín, Česká republika)

  • Miloslava Chovancová

    (Ústav managementu a marketingu, Fakulta managementu a ekonomiky, Univerzita Tomáše Bati ve Zlíně, Mostní 5139, 760 01, Zlín, Česká republika)

Abstract

Price ending is an important pricing strategy that has been used by retailers over the years. The trend seems to be effective considering how consumers react especially to products with odd price endings. This review is aimed at providing an understanding of the psychological influences of price ending on buyers, using the theory of perception. It analysis theories and existing literature on the topic and brings out augmentative pricing strategies that retailers can adopt in consumer markets. Also, an exploratory study was conducted to identify the prevalence of odd prices in the Czech retail sector. The exploratory study was based on 16 different home-drop advertising material, short magazines and leaflets by retails shops in the Zlin region. These leaflets, short magazines and home-drop advertising material were collected and analyzed over 3 month period to identify the dominance of odd and even pricing strategy (total number of advertisements = 922). Also, in order to have a comprehensive coverage of the odd-even pricing phenomenon, opinions of some buyers were sought on their perception of odd-pricing and how the odd-pricing influence their buying decisions. Opinions of a total of 173 shoppers were sampled. The study found clear evidence of the predominant use and preference by shoppers for odd prices compared to even prices in different product categories, especially fast moving consumer goods. The paper concludes by providing the marketing implications and suggestions on when odd and even price ending strategies should be used and for what category of products this strategy can be used. Also, the implications of price endings on marketing communication are highlighted.

Suggested Citation

  • Emmanuel Selase Asamoah & Miloslava Chovancová, 2011. "The influence of price endings on consumer behaviour: an application of the psychology of perception," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 59(7), pages 29-38.
    • Handle: RePEc:mup:actaun:actaun_2011059070029
    DOI: 10.11118/actaun201159070029
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    References listed on IDEAS

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    1. Mark Stiving, 2000. "Price-Endings When Prices Signal Quality," Management Science, INFORMS, vol. 46(12), pages 1617-1629, December.
    2. Stiving, Mark & Winer, Russell S, 1997. "An Empirical Analysis of Price Endings with Scanner Data," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 24(1), pages 57-67, June.
    3. Schindler, Robert M & Kirby, Patrick N, 1997. "Patterns of Rightmost Digits Used in Advertised Prices: Implications for Nine-Ending Effects," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 24(2), pages 192-201, September.
    4. Robert C. Blattberg & Kenneth J. Wisniewski, 1989. "Price-Induced Patterns of Competition," Marketing Science, INFORMS, vol. 8(4), pages 291-309.
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