Odd even pricing

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Odd even pricing
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A pricing strategy which involves ending prices with certain numbers to influence perception of price of a product (Ferrell O.C., Pride W.M., p. 595). Odd-even pricing is one of the psychological pricing practices.

Odd pricing

Odd-numbered pricing is based on setting a price just below even number. Odd pricing strategy is used to give consumers perception that a product is less expensive, which connotes a bargain. This technique is based on assumption that more of a product can be sold when its price ends with an odd number (e.g. $89.99 instead of $90.00, or $99 instead of $100) (Ferrell O.C., Pride W.M., p. 595).

Even pricing

Even-numbered prices (e.g. $50.00 instead of $49.95) are used to suggest a better quality or exclusiveness of a product (Ferrell O.C., Pride W.M., p. 595) and to make a customer feel they are not being tricked (Canwell D., Sutherland J., p. 300). It is supposed to influence buyers perception of a product as more appealing.

Psychology

Ending a price with an odd number is based on a theory that the first digit of the price, because we read from left to right, draws more attention (Bojanic D. C., Reid R. D., p. 568). It makes customer more likely to buy a product for, e.g. $9.99 than the same one for $10.00, because a price that starts with 9 gives an illusion of a better deal than the one that starts with 10. Odd pricing can also cheapen the image of a product in a bad way making it seem as a low quality item, that's why it's important to know the type of customer before choosing a better strategy.

References

Author: Karolina Kopecińska