Greenhouse Canada

Features Business Retail
Pricing to the nines


September 16, 2009
By Amanda Ryder


Topics

Sept. 16, 2009 – Marketers preach that 99 cents beats a dollar every
time. But do customers really see the difference? The Globe and Mail’s
Report of Business magazine recently featured a story that explored
whether pricing to the 99’s was still effective.

Marketers preach that 99 cents beats a dollar every time. But do
customers really see the difference? The Globe and Mail’s Report of
Business magazine recently featured a story that explored whether pricing to the 99’s was still effective.

The most often quoted thinking behind the original 99-cent pricing
method was that people read from left to right. We hold the dollar
amount of a price in our minds and ignore the digits after the decimal
system. This means retailers can pocket an extra 99-cents without
shoppers really realizing. The article also explored other potential
reasons behind this concept.

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The debate as to whether this is a tried and true tactic has been
questioned for years with some studies proving it effective and others
questioning it. In April, Walmart recently announced it was backing
away from the 99-cent tactic and will start eliminating fractional
prices. The company will instead round prices to even dollars – so
$20.00 instead of $19.99.

We wanted to know: what are your thoughts on 99-cent pricing? Do you do
it in your shops? Is it an effective marketing tool? Why or why not?


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