Price Endings Research Articles

The impact of intermediate option availability on consumers' choice: The moderating role of price roundness

Given the surge in consumer demand and rapid inflation, businesses have turned their attention to premiumization as a means of market segmentation. Building upon previous studies that highlight the significance of the compromise effect in gaining market share for intermediate options, this research examines the feasibility of revenue management strategies using 'psychological pricing' in hospitality and tourism products. By investigating choice behaviors related to intermediate options, we explore how subtle pricing manipulations can enhance the compromise effect. Through five experiments, we validate our hypotheses. Our findings not only extend the literature on pricing behavior and hospitality concerning rounded pricing but also provide insights on how to strategically adjust psychological pricing to align with real-time market conditions.

ANALYSIS OF THE RELATIONSHIP BETWEEN PSYCHOLOGICAL PRICING STRATEGY AND PRODUCT QUALITY AND THEIR IMPACT ON MARKETING EXCELLENCE (A CASE STUDY OF RETAILERS OF CELLULAR DEVICES IN NAJAF)

This research aims to understand and analyze the impact of psychological pricing and product quality on marketing excellence. The research is descriptive and quantitative, focusing on the retail market for mobile phones in the city of Najaf. The researcher relied on a study population of 423 retail stores catering to consumers' needs for mobile phones. A random distribution of questionnaires was employed to obtain genuine results as a tool for collecting primary data from a sample of 100 responses, representing 23.6% of the population. Each questionnaire comprised 35 questions. The primary data was collected and analyzed, and research hypotheses were tested using the statistical package for social sciences (SPSS). The research is structured into three main sections. The first section discusses the psychological pricing strategy and product quality. The second section delves into the marketing excellence of the surveyed company through innovation and creativity, brand name, as well as the site, and differentiation achieved by the company in comparison to its competitors in the market. The third section presents conclusions and recommendations.

TOURISM PRICING STRATEGIES

Tourism pricing strategies are vital for businesses in the travel and hospitality sector to maximize revenue, attract and retain customers, and stay competitive. These strategies range from value-based pricing, which relies on the perceived value to the customer, to dynamic pricing, adjusting costs in real-time based on market demand. Other approaches include discount pricing for off-peak periods, package deals offering combined services, psychological pricing to make costs seem more attractive, penetrationpricing to quickly gain market share, premium pricing for exclusive experiences, seasonal adjustments, cost-plus pricing to cover expenses and ensure profit, and geographical pricing to account for regional economic differences. Each strategy has its unique implications and is chosen based on the business’s goals, market conditions, and customer preferences.

Penetapan Harga Produk Industri Kerajinan Kayu UD. Akar Dewa Jati di Desa Karanganyar Kecamatan Kendit Kabupaten Situbondo dalam perspektif Etika Bisnis Islam

Odd pricing applied by UD. Akar Dewa Jati are only partly in wooden craft products. With the reason of attracting consumer interest and it is felt to be quite effective. The aim is to gain profits, gain market share and maintain the survival of industrial or business premises. Determining an odd price strategy is in accordance with Islamic business ethics by always prioritizing the principle of balance or fairness and responsibility in the form of honesty in conveying product prices, carrying out fair transactions and not committing fraud that could cause harm to other people. Meanwhile, for the remaining change from price rounding, if there is no change, it will be replaced with candy or transferred to social funds.

The Influence of Psychological Pricing, Brand Awareness and Promotional Media on Purchasing Decisions for Mineral Water Products

This research aims to determine the influence of psychological pricing, brand awareness, and promotional media on decisions to purchase mineral water. In this research, the quantitative descriptive method was used. In this research, the data collection method used is the survey research method. Data collection was carried out by distributing questionnaires online via Google Form to 30 people. Judging from the research results, it can be seen that there is no influence between psychological pricing, brand awareness, and promotional media on purchasing decisions. Psychological pricing can have a significant influence on student purchasing decisions. Prices that end with a lower number tend to make the product appear more affordable and attractive to consumers. This pricing strategy can influence the perceived value of the product and generate incentives to purchase mineral water. Brand awareness of available mineral water also influences students' purchasing decisions. If students have good knowledge about a particular brand of mineral water being sold, they are more likely to choose that brand because they have higher trust and familiarity with that brand. The promotional media used to market mineral water products also plays a role in influencing students' purchasing decisions. If you use effective promotional media such as television advertisements, social media, or attractive brochures, you can attract students' attention and influence them to choose the mineral water products being sold.

The Effect of Odd Price on Purchasing Decisions Mediated by Processing Fluency

Setting odd prices is one of the pricing strategies applied in retail. Setting odd prices can help one of their goals, which is to get more customers. It is a tool that companies use to influence consumer buying decisions. Consumer purchasing decisions are a reason for how consumers determine the choice of purchasing a product in accordance with their needs, desires, and expectations so that it can lead to satisfaction with product dissatisfaction and odd prices can have an impact on setting odd prices because it can make consumers feel satisfied and benefited and can lead to customer satisfaction. Ease of calculation fluency (processing fluency) will change their price perception and increase purchase intention for a final price that is consistent between the original price and the selling price is much cheaper than under inconsistent conditions, even though the magnitude of the discount under conditions of consistent final prices is lower than under inconsistent final price conditions. This research is a quantitative study and the respondents in this study were 100 respondents. In this study, the samples were taken by means of nonprobability sampling, namely by accidental sampling technique. Based on data analysis, it is known that there is an effect of odd prices on purchasing decisions, there is an effect of processing fluency on purchasing decisions and processing fluency mediates the relationship between odd prices and purchasing decisions.

The Effectiveness of Pricing Strategy on Purchasing Decisions for Bookkeeping and Chasiers Paccounting Applications by Panemu

This research was conducted to determine whether there is an effectiveness of pricing strategy on purchasing decisions for bookkeeping applications and cashier PAccounting by PT Panemu Solusi Industri. This study used a descriptive qualitative approach with direct observation methods and interviews by companies. The conclusion in this study is that companies apply several different Paccounting pricing strategies, including discount pricing strategies, freemium pricing strategies, premium pricing strategies, and psychological pricing strategies. Each strategy used has a different purpose, where the discount pricing strategy is expected to make consumers choose the highest price package, then the freemium pricing strategy focuses on attracting potential users with a trial period at no cost, while the premium pricing strategy offers consumers with a full-featured application, and the psychological pricing strategy aims to make potential customers think that the product is not expensive. The results showed that the four strategies had a positive impact on consumer interest seen from the increase in sales for 3 years.

Psychological Pricing and the Performance of Small and Medium Tourism Enterprises (SMTEs) in Arusha City

Psychological Pricing and the Performance of Small and Medium Tourism Enterprises (SMTEs) in Arusha City

Implications of Psychological Pricing on Contemporary Muslim Retailers and Consumers in Nigeria

Pricing is one of the major components of businesses. Retailers have adopted different pricing modes due to the need to devise sustainable pricing strategies. This is one of the reasons for the development of psychological pricing. Psychological pricing has adverse effects on Muslim retailers and consumers due to their involvement in zulm (deception). Therefore, this study examined the implications of psychological pricing on Muslim retailers and consumers in Nigeria. The paper adopted qualitative and analytical methods. The qualitative method was used to review related literature, while the analytical method was used to examine and analyse the implications of psychological pricing. This study found that psychological pricing is used for profit maximization through deception. Psychological pricing has led to the involvement of Muslim retailers and consumers in vices such as deception, lying, and trickery. This paper concluded that psychological pricing affects the spiritual and moral lives of Muslim retailers and consumers. The paper recommended that Muslim retailers and consumers adopt and accept other pricing strategies that do not involve ambiguity and deception. They are also encouraged to use credit cards in order to avoid paying beyond the tagged price of a commodity.

A meta‐analysis on the effects of just‐below versus round prices

AbstractMarketers' proclivity for just‐below prices (e.g., $9.99) is rooted in an expected higher demand than for round prices ($10.00). The literature, however, lacks a comprehensive assessment of when and how price endings matter. Three mechanisms might explain price‐ending effects on consumers' purchase decisions: just‐below prices (1) improve price perceptions, but (2) impair perceived product quality, and (3) cause consumers to underestimate prices. A preregistered meta‐analysis (k = 69 studies, m = 362 effect sizes, N = 40,541) established that just‐below (vs. round) prices tend to increase purchase decisions (g = 0.13, CI95%[0.01, 0.25]), result in an advantageous price image (g = 0.28, CI95%[0.09, 0.48]), have no effect on perceived product quality (g = 0.00, CI95%[−0.17, 0.18], p = 0.96), and are more often underestimated (g = 0.67, CI95%[0.04, 1.30]). Participant, study, price, and product characteristics moderate the magnitude of these effects. Overall, the effect sizes are small and highly heterogenous, p‐curve analyses revealed a large proportion of nonsignificant effects, and publication bias corrections suggest smaller and, at times, nonsignificant true effects. We discuss theoretical and applied implications for the pricing literature.

ФОРМУВАННЯ МАРКЕТИНГОВОЇ ЦІНОВОЇ ПОЛІТИКИ ПІДПРИЄМСТВА З ВРАХУВАННЯМ ПСИХОЛОГІЧНИХ ЕФЕКТІВ СПРИЙНЯТТЯ ЦІНИ

This study aims to explore the main objectives of marketing price policy and the various pricingstrategies available to achieve these objectives. The research distinguishes between two types ofprices in marketing price policy: basic price, which is seller-oriented, and fair price, which isbuyer-oriented. Additionally, the study differentiates between price policy and pricemanagement policy, with the former involving setting the maximum price for the product and itspositioning, and the latter maintaining actual prices and regulating conditional prices through discounts and price discrimination.
 The research delves into an extensive analysis of different marketing pricing strategies, such aspricing above or below market prices, pricing based on competitors or consumer properties, pricing based on demand dynamics, pricing with discounts, special conditions, and price tiers, and the strategies of penetrating prices and psychological pricing.
 Furthermore, the study identifies three main objectives that a well-formulated pricing policy should achieve: achieving the company №9, financial objectives, meeting market realities, andsupporting product positioning, quality, and distribution. The research also highlights thepsychological effects that must be considered when forming marketing price policies. Theseinclude the effect of tying a cheap product to an expensive one, the Weber-Fechner law, the useof the number 9 to sell products better, the combination of frequently purchased products, theimportance of details in advertising, and the emphasis on benefit or pleasure. Additionally, thestudy emphasizes the use of the word “free”; the focus on time spent or saved, the taboo on unjustified price comparison, the power of context, testing different price levels, and the impact of price tag matters and likeness on sales.

СПІВСТАВЛЕННЯ ПІДХОДІВ: НАУКОВИЙ ОГЛЯД ОПТИМІЗАЦІЇ РОЗДРІБНИХ ЦІН В ОНЛАЙН ТА ОФЛАЙН ТОРГІВЛІ

The aim of this paper is to compare online and offline retail price optimization and highlight the key differences. Online retail price optimization uses algorithms and data analysis to set the best price for an item on an e-commerce platform, considering product demand and competition. Offline retail price optimization involves manual methods, such as cost-plus pricing, market pricing, and psychological pricing, to price items in physical stores. The study involved a review of existing literature on retail price optimization and its application in online and offline retailing. The results showed that data availability is a significant difference between online and offline retail price optimization, with online retailers having access to more data. Online retailers can quickly adjust prices because of automation, while offline retailers need to manually change prices. The results of the study emphasize the importance of price optimization in both online and offline retailing and the benefits of using both methods together. The findings provide valuable insights for retail businesses and can inform future research in retail price optimization.

Organizational culture and company values: a cross-sectional study on public companies in Indonesia

Purpose – This study examined the effect of corporate culture (the availability of corporate pages on the website of the company) on the corporate value (Tobin’s Q) of the companies listed on the Indonesia Stock Exchange. Design/methodology/approach – The study uses secondary data extracted both from the company website and the financial reports for the year 2019. There are 530 companies that met the selection criteria. The hypothesis is tested using the cross-sectional ordinary least square (OLS) regression. Findings – The results show a modest positive effect of corporate culture on corporate value. The robustness test reveals that the finding is more pronounced among small companies. The study also includes four other variables, namely employee activities, employee training programs, honors earned, and charity programs. It was found that only honors earned have a significant positive effect on corporate value. Research limitations/implications – This study uses a cross-sectional-based analysis, making it lack of capability to look for the multi-years effect of the variables being investigated. It measures Tobin’s Q using the end of the fiscal year stock price. Using one single day as the base of calculation may ignore the fluctuation of the stock prices over the whole year. Practical implications – Given the findings, it is recommended that the company shall disclose and promote its corporate culture as a means of informing potential investors about the company’s strong commitment to doing business with a specific culture. Originality/value – The study examines the issue using cross-sectional data and divides the sample based on the size of the companies allowing it to seek more evidence on whether the main issue under investigation is sensitive to the size of the company.

Zero price effect on hotel demand: Evidence from a discrete choice experiment

A Choice Experiment is employed to analyze the effect of a free night promotion on hotel demand in the setting of a relatively underdeveloped area in China. Results from Error Components models show evidence in favor of a non-rational “zero price effect” (ZPE): with total price and all other aspects equal, people tend to choose the hotel which offers one free night. In addition, free pricing is shown to have stronger effects in diverting preferences than a trivial price (1 RMB). However, it is not the only successful psychological pricing strategy; its effects do not significantly differ from those of a materially equivalent discount. Building upon recent methodological innovations using Choice Experiments to study pricing strategy, this paper is the first to extend the technique to study the ceteris paribus ZPE. Our findings can help hotels make use of the ZPE to attract consumers.

Psychological pricing: Myth or reality? The impact of nine-ending prices on purchasing attitudes and brand revenue

Price is the variable through which the value proposition of brands is monetize, therefore, it is the driver that guarantees the sustainability and profitability of companies. Among different psychological pricing tactics that exist, prices ending in nine are the most accepted and used by practitioners as a strategy to penetrate markets; but this strategy should be carefully revised and applied as it is context dependent and has differential effects among categories and types of brands. Drawing on the importance of psychological pricing, the extended use of nine-ending prices and the identified need of a better understanding, this study validates the impact of such prices on the purchasing attitudes of consumers and the differentiated effect on revenue, among various brands and product categories, finding that this tactic significantly affects consumers' purchasing attitudes and brands’ revenue levels, but to a different extent, depending on the product category, the brand positioning and preference.

Asymmetric behaviour and the 9-ending pricing of retail gasoline

Using daily unleaded gasoline data for almost the totality of Western Australian retail outlets over twenty years, we find that retail prices are most rigid when they are 9-ending as opposed to other price endings. Upward rigidity from a 9-ending retail price is found to be greater than downward rigidity in terms of a lower number of price movements. Irrespective of whether or not a 9-ending price is being charged, an upward gasoline price movement is likely, in absolute terms, to lead to a larger size of price change than a downward movement. In sharp contrast, we find that wholesale gasoline prices are not characterised in such ways and that irrespective of whether or not taxes are included, there is uniformity across the frequency distribution of price endings. The presence of 9-ending pricing affects the nonlinear response of retail gasoline prices to wholesale price movements.

Psychological price perception may exert a weaker effect on purchasing decisions than previously suggested: Results from a large online experiment fail to reproduce either a left-digit or perceptual-fluency effect.

Retail store prices are frequently set to either a just-below (e.g., $1.99) or rounded to (e.g., $2.00) integer levels. Previous studies proposed two price-perception effects that may underly such psychological pricing strategies. First, the left-digit effect (LDE) assumes consumers read prices left-to-right. Cognitive limitations let consumers overweight the impact of digits on the left side of the price while underweighting digits on the right side of the price. This effect appears to conflict with the contradictory perceptual fluency effect (PFE), which proposes that a rounded price is more perceptual fluent and, thus, more attractive to consumers. To address these paradoxical effects, we conducted an online experiment with 266 participants making a total of 4788 purchasing decisions where we systematically varied the purchasing prices of otherwise identical lottery tickets across two price levels. Against expectations, we found no support for either of the two price-perception effects. We propose three possible explanations of these null results.

Shopping in Reality or Virtuality? A Validation Study of Consumers' Price Memory in a Virtual vs. Physical Supermarket.

This study validates a VR supermarket as a research tool by studying the influence of the food shopping setting on consumers’ price memory—an important antecedent for price comparisons in the purchase situation. In a quasi-experiment, two groups of consumers were given a shopping task in either a physical supermarket or a virtual reality supermarket setting. Upon task completion, participants’ explicit and implicit price memory was measured across three food product categories (pizza sauce, pasta, and dark chocolate). Results revealed no significant difference between the two settings, supporting the comparability between the VR shopping experience and the experience in the physical supermarket. The VR supermarket can therefore be a valid tool for studying consumer food choice behaviour in a shopping context. Further results show that explicit price memory is weaker compared to implicit price memory, that even prices are remembered better than odd prices, and that price memory follows the expected pattern in a VR supermarket as well. Finally, exploratory findings indicate that the feeling of physical presence and self-presence is relatively high for this particular VR supermarket, whereas social presence is weaker.

Consumer Responses to Selected Activities: Price Increases, Lack of Product Information and Numerical Way of Expressing Product Prices

The importance of constant consumer testing is emphasized in order for companies to deliver the highest value for the quality of products and services. To explain the psychological impact of price on product selection, and other factors that determine consumer behavior, a survey method was applied. When deciding to buy a product, the consumer’s perception of the value of selected re-search products (clothing, footwear, children’s equipment) is crucial and it can often differ from the value derived from the price set by the seller. The conducted research proved that sellers can really influence consumers’ decision to buy a product with their price, and that a large number of consumers perceive the price incorrectly and thus buy more than they planned. Having in mind the subject of this paper, the basic scientific goal was to define a consumer model that integrates factors (variables) influencing consumer behavior to answer the question of how and why con-sumers react to rising product prices, how much they use the importance of information about product quality as a parameter of the decision, and how much consumers when choosing a product notice the price ending in a different number from the number of zeros. As consumer behavior is strongly influenced by a number of factors, it can be defined that the consumer’s response to selected activities: price increases, lack of product information and numerical way of expressing product prices may not contain all factors and their relationships and simplifies the picture of the consumer model. In order to test hypotheses about the extent to which customers are sensitive and willing to replace a product with certain substitutes, i.e., how willing they are to conclude about a product they buy based on price if they do not have enough information about the product and how much zeros are favored by consumers when shopping, an empirical study was conducted on a sample of 214 respondents. The results of the research indicate that in moments when respondents do not have enough information about the product, they are not inclined to draw conclusions solely on the basis of price, and prices ending in odd numbers or non-zero are not more attractive than those ending in zero.

Trade price clustering in the corporate bond market

PurposeIn this paper, the authors document the existence of price clustering in the US corporate bond market.Design/methodology/approachUsing a sample of 8,422,593 corporate bond trades in 2014, the authors find that over 18% (1,522,284 trades) of all bond trades end in a clustered price, defined as a price ending in 00, 25, 50, or 75.FindingsOverall, the authors find that both bond rating category and risk, as measured by standard deviation of prices, play a role in price clustering; speculative grade bonds account for the majority of clustered prices. Clustered prices are more likely to have higher coupon rates, higher prices, and higher standard deviations of price than bonds with non-clustered prices. Regardless of size, both buy and sell dealer trades with customers (relative to interdealer trading) lead to an increase in price clustering. Dealers appear to use clustered prices when purchasing from and selling to institutions and, therefore, may use a clustered price to insulate themselves from the risk of asymmetric information. Additionally, the prevalence of clustered prices for retail-sized dealer sell trades suggests that dealers exercise dealer power over retail-sized traders.Originality/valueThis paper contributes to the literature on price clustering by examining trade price clustering of corporate bonds. It is different from previous papers on price clustering in equities. Given that bonds tend to be priced off of yield, it is unusual that trade prices cluster. It also demonstrates what kind of bonds cluster and with which customers dealers trade at clustered prices. It parallels other research in demonstrating dealer power over retail-sized traders.