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Also, people think they're getting a deal when they buy bulkier items. For example, here in my town, you can buy a five ounce can of tuna for, say, 79 cents. Th
by delinka 14y ago
Also, people think they're getting a deal when they buy bulkier items. For example, here in my town, you can buy a five ounce can of tuna for, say, 79 cents. That's 15.8 cents per ounce. The twelve ounce can goes for $1.98. Although the tags on the shelf mention the per-ounce price in addition to the full price, people will buy the twelve ounce can. Now maybe there are other reasons to over pay- don't want to open two cans later; 10 onces is too little, 15 ounces is too much. But it's probably the psychology of "more is better" overriding reason's "lower price per ounce."
It's not necessarily about "bad at math" - it's about psychology. Ask Wal-Mart - there's a reason all their prices end in certain numbers and seldom the 'standard' numbers. For example, you'll often see $x.44, or $x.92, but seldom x.95 or x.99. I don't know the precise reasons because Wal-Mart won't discuss it. Suffice it to say "psychology."
What ultimately irritates me about this, the price will go up on a box of Cap'n Crunch over the course of three months. Then suddenly "20% more for free!" get stamped on a larger box at that higher price.
- gutnor 14y agoThat reminds me of the offer you can still see in Camden (London). There are street booth selling calling cards: 1 card for 2.99, 3 cards for 8.99 :-) In the UK they also show the price per unit for all the packaging. There is just one caveat: they don't do it with the discounted prices, only the base price.
- lifeisstillgood 14y agoMy favourite London based pricing quote was on the pub just leading out of Carnaby Street for years. Buy one pint for the price of two, and we'll give a second pint absolutely free ! Loved it for years. Never went in.
- hippich 14y agoRe: odd pricing. I've seen in store saying "discount bla-bla-bla do not applies to items with price ending with .94." So they used price as unique feature to see if item was already discounted.
- gmac 14y agoAt Dixons in the UK (when I briefly worked there 10 years or so ago) the pence were used in a similar way to signal things to floor staff. For example, IIRC, prices ending .98 signalled a discontinued product. Additional staff signalling was provided by messages on price tags. For example, 'please ask if you need help' meant 'high-margin, high-commission item', whereas 'have you remembered your spares and accessories?' meant 'low-margin, low-commission, item'.
- Albuca 14y agoThat is actually still in use today. Working part-time in retail at Staples Canada, I can tell you that all of our prices ending in $x.97 or $x.x7 are clearance; and therefore subject to an additional discount if there is a current promo going on. As for the random prices, I have no idea. Although it does make it easier when doing prices changes for flyers, because in each section, no two products have the same price (cent wise).
- ars 14y agoThis basically confirms that getting rid of the penny and the nickel is a good idea. Just round everything to one decimal place. If retailers don't care about amounts under $0.10 then there is no need for such a currency.
- adavies42 14y agopointer tagging!
- ljd 14y agoI wouldn't quickly assume Walmart's strange pricing practices are psychological. I know that Walmart uses advanced analytics for doing pricing and expectation of sales. So it could be possible that these odd cent items aren't for psychological purposes but instead for building accurate pricing models. I can only speculate though but this is what I do and I know that's why we like odd cent items. My company helps eCommerce shops with pricing. Articles such as this on Wikipedia (http://en.wikipedia.org/wiki/Psychological_pricing#Historical_comments http://en.wikipedia.org/wiki/Psychological_pricing#Historica...) can give you an idea about how much speculation there is in pricing. While I don't have the study readily present, there was actually one done where 7th and 8th graders were shown a number of items with "odd prices" most notably "x.99" prices and were asked later on if they could recall the prices, the distribution were heavily weighted against odd pricing. Most of students recalled either the exact price or rounded up. Very few rounded down.