Price endings and consumer segmentation

Abstract

Price Endings and Consumer Segmentation -Research Paper Abstract PurposeTo investigate the area of price endings to determine which groups of consumers are more likely to respond with 9-endings as opposed to round-endings. MethodologyA questionnaire was developed that tested respondents' use of 9-endings as opposed to roundendings dependent on classification by gender and age. Respondents were required to estimate the price they would be expected to pay in stores for six products. This methodology enabled the researchers to generate a large sample size and to encourage accuracy of response. FindingsThe main finding was that there was a difference between gender groups; women were more likely to respond with 9-endings than men and hence segmenting the market is the way forward when investigating price endings. Research limitationsThe research only considers segmentation by gender and age. Further research needs to be undertaken to fully understand the consumer responses. Practical implicationsAlthough the difference between 99 cents and a $1.00 is small, for high volume items this can have a significant impact on gross profit and margins, particularly for low value items. If retailers understand which groups of consumers were more likely to be attracted to the round-endings they could use this knowledge to determine the most effective prices. Originality/valueThis research follows on from a price trial conducted into price endings and is the second phase of an investigation into whether 9-endings are effective. It proposes a theory that has been empirically tested and points the way forward for future research in this area.

The impact of psychological pricing strategy on consumers' buying behaviour: a qualitative study

“…Additionally, Blattberg and Wisniewski (1989) did another extensive analysis of scanner data from a major supermarket also showed that more than 80% of the prices in the shops ended with numeral nine. A more recent research by Harris and Bray (2007) discovered that 64% of prices in the UK ended with a digit-nine and other researches by Bergen et al (2004) with internet-based shops also showed a nine-ending price. Also, Schindler (2001) and Guéguen and Legoherel (2004) found the presence of the same trends in the retail shops in western economies.…”

“…The cost of importing the pennies was less than the profit made on sales of the newspaper. It has been explained by some researchers (Burns, 1995;Hower, 1943) as cited in Harris and Bray (2007), that odd-ending pricing was brought into practice for operational reasons with the introduction of cash registers in 1879. The reason behind this was assumed to be that shop proprietors wanted to make sure that tills were open for every transaction to prevent the dishonest cashiers from pocketing the cash.…”

“…A study by Harris and Bray (2007) demonstrates that men and women do take price endings differently, and that women are more likely to favour odd-ending prices. The odd-ending prices or the psychological prices create psychological illusion (Basu, 1997) because of this the customers get attracted toward the products priced with odd-ending prices.…”

“…The shoppers, who are relying on a heuristic process of the information, ought to be more sensitive to nine-endings. Therefore, while little attention has been directed to exhibit the effect of age, education, gender, lifestyle, and family size of nine-ending choice (with the exceptions of Harris and Bray, 2007;Macé, 2008).…”

Televizijos reklamos elementų vertinimo ir reklamuojamų prekių pirkimo tendencijos Lietuvoje krizės sąlygomis

“…Atliekant sociologinius tyrimus amžius -svarbi ir įprasta demografinė charakteristika. Paprastai bandoma apimti platų amžiaus tarpsnį (nuo paauglystės iki senatvės), jį vėliau skaidant ir analizuojant atskirais intervalais, pavyzdžiui, 15-29 m., 30-44 m. ... (Harris, Bray 2007), iki 20 m., 20-30 m. ... (Kaynak, Kara 2001Seock, Baylei 2008) ar panašiai -20-29 m., 30-39 m. ... (Okazaki, Hirose 2009). Keblumų atsiranda lyginant greta esančius intervalus dėl galimos jų sankirtos: mokslinėje literatūroje nurodoma, kad chronologinis žmogaus amžius gali nesutapti su jo "pažintiniu" amžiumi, kai keturiasdešimtmetis jaučiasi kaip trisdešimtmetis (Stephens 1991 šios priežasties racionaliau tiriamąją imtį skaidyti kartomis, kurios nei teoriškai, nei praktiškai negalėtų turėti susiliejimo erdvės, niveliuojančios skirtumus.…”