Generic substitution by pharmacists was introduced in April 2003 in Finnish pharmaceutical markets. This article examines the impact of generic substitution on price development. This study examined all of the 2,100 substitutable drugs in Finland. The impact of generic substitution on price competition was significant. The average price of substitutable drugs decreased by more than 10%. However, the price development was uneven; some prices increased whereas others decreased by more than 50%. The most important factors that influenced the price development were the number of competitors, whether the drug was originator or generic and the width of the price band.

No abstract

This paper examines consumer price knowledge by comparing the actual market prices and consumer price estimates in the Finnish grocery market. Although the individual price estimates of consumers were found to differ significantly from the actual market prices, the medians of consumer price estimates and market prices were very close to each other for most of the products in our data. The study indicates that consumer price knowledge is not as poor as previously suggested by the results of point-of-purchase studies. We suggest that at least part of the weakness in consumer price knowledge can be explained by differences in market price variation.

This article examines how the price knowledge of Finnish consumers has changed since the adoption of the euro. Our study measures price knowledge by comparing consumers’ price estimations with actual market prices at two points in time: before (October 2001) and after (March 2002) the changeover to the euro. Furthermore, we study potential differences between three different age groups. We approach the issue using four determinants, namely (1) response percentage (the percentage of respondents who were able to give a price estimate); (2) the difference between the median of the market prices and the median of the price evaluations; (3) the difference between the average of the market prices and the average of the price evaluations; and (4) the average of the absolute deviations between the average of product prices and consumer price evaluations. Our results indicate that, on average, consumers know the prices of grocery products quite well despite the prevailing dispersion of actual prices in the market. Price knowledge was found to be rather good both before and after the introduction of the euro. Nevertheless, the good price knowledge after the changeover was probably because consumers remembered the prices asked in the old currency and converted them to euros. The majority of respondents were able to give price estimates that were within the range of actual price dispersion in stores. The results also show some deterioration in price knowledge after the advent of the euro. There was variation between different age groups, and it seems that the introduction of the euro has affected various groups differently. Consumers aged 30–50 years knew prices best both before and after the euro, whereas the ability to estimate prices had declined most among consumers above 50 years after the euro changeover.

PurposeNominal prices are known to have a distinct impact on pricing, which is normally seen in the form of 9‐ending prices. This article aims to study the effect of nominal prices on pricing patterns using data from a real‐life experiment: the currency changeover to the euro.Design/methodology/approachThe study examines quantitatively the impact of the euro changeover on the price endings used in grocery retailing.FindingsThe results show that the length of the price has a marked impact on price endings. The adjustment of price endings is also found to be a very slow process.Research limitations/implicationsThe study examines pricing two different market situations within one industry (grocery retailing) in one country (Finland) and shows that there is a difference between pricing patterns in different market situations. It is clear that more research is needed to obtain a more detailed picture of pricing patterns by studying diverse market situations.Originality/valueThis article gives a better understanding of the effect of price length on price endings based on real‐life data sets from before and after the euro changeover. The results are robust because the studied markets and, thus, the culture remained the same over the study period. Further, this article for the first time examines the adjustment of price endings in a market change caused by a currency changeover.