Marketing Professor Dr. Lora Tu explains the power of nine - ending pricing and how that affects a buyer's perception.
RESEARCH HAS PROVEN THE BOTTOM-LINE VALUE OF NINE-ENDING PRICING AND ITS POWER TO BOOST RETAIL SALES. DROPPING A PRICE JUST A SINGLE PENNY GIVES BUYERS THE SENSE
THAT THE PRICE IS MUCH LOWER THAN IT REALLY IS.
ACCORDING TO DR. LORA TU (LOH-ruh TOO), CLINICAL ASSISTANT PROFESSOR OF MARKETING AT BAYLOR UNIVERSITY, THE NINES HAVE THE MOST INFLUENCE ON
ANALYTICAL THINKERS, THOSE WHOSE BRAINS VIEW EACH INDIVIDUAL PIECE OF THE PRICE, AS OPPOSED TO THE BIG-PICTURE PERCEPTION OF HOLISTIC THINKERS
When an analytical thinker processes a price tag of $2.99, they will focus more on the left-most digit, and they perceive the two as the focal information. And they disregard the right-most digits. When they see a price tag of $2.99, they process the price as “two-something.” And they perceive the price of $2.99 as much lower than the round price of $3.00 which is only one unit higher.
The one unit difference does not hurt consumers that much, but it actually helps the marketers, because nine-ending pricing has been proved to be very effective in helping people to perceive the product as cheaper.
CONSIDERING THE PRICE AS A WHOLE CAN MAKE US LESS SUSCEPTIBLE TO NINE-ENDING PRICING, TU SAYS, AND MAY EVEN HELP PREVENT IMPULSE BUYING.
For consumers it is oh so very useful if we understand how our brain works, sometimes we might not be so easily influenced by some marketing strategies or promotional messages.
THE BUSINESS REVIEW IS A PRODUCTION OF KWBU, LIVINGSTON & MCKAY, AND THE HANKAMER SCHOOL OF BUSINESS AT BAYLOR UNIVERSITY.