Odd and Even Pricing

Do you know how psychological pricing tactics make you spend more?

Psychological pricing is a vital phenomenon which we experience on daily basis without realizing it. Let’s know and understand the tricks many companies use to encourage spending.?

Whether you are buying, clothes, groceries or electronics items, the prices of your products are likely to end with 99, 79, 89 etc. This pricing practice can make you more likely to purchase that item in six distinct ways

1-Money back product pricing- When we are buying products or service at odd prices, we expect that we will get some change back from the payment counter. The trick of psychological pricing gives us the sensation of getting money back despite the fact that we just purchased a product. It happens even when we are not paying cash, it makes us feel that we got some rewards or we saved some money. For an example, we may feel like we are saving RS 50 if we buy a product for RS 450 why because we compare the price to the threshold price of RS 550, even if there are no additional sales on that particular product.

2-Price label/Tags-?odd-even- There are two types of pricing tricks the seller of products. One is odd price and other is even price. Odd prices are that prices which are just a below some comparative pricing threshold, like RS 0.99, RS 499, RS 899, RS 0.89 etc. Even pricing is exactly on the threshold. Like RS 400, RS 10, RS 50. Whenever we see the odd price tag, we think that we are paying less than the threshold price and we can save some money too. For Instance, we are going to purchase a shirt under RS 1000 and you show the tag of RS 999.99. Now, we are more likely to purchase the shirt because our brain will process it as RS 900 not just 1 RS less in thousand rupees.

3-Power of pricing which end with 99 -?The odd prices show our brain that we are going to get a good deal. Seeing many price tags with odd prices mainly those ending in 99, can most of the time indicate a markdown for sale. A big banner which shows us all shirts for sales at RS 99.99 often utilize odd prices to highlight sale. Why because, the adds are eye-catching and promotes a less price to customer. As a result, the odd price is not ignored and even they create an image into the mind of customer a saving rather than number.

4-Level Effects and Anchoring- It’s our tendency to focus first on the left digit of the price tag that is called left digit anchoring. It is part of a larger trend called level effects. Level effect is something when consumer choose to ignore the last digit of a price tag rather than interpreting them to a round up price. Left digit of the price digit matters a lot because it determines the order of magnitude of the price. Which means, the left digit will show whether the product price is in the ones, tens, hundreds or in thousand.

Undoubtedly, it is the most important digit and the following number will be less substantial in terms of the impact on our pocket. While recalling prices, we tend to remember the left-most number because of its importance rather than the entire amount. Marketers rule this habit and most of the time sell products and services at a price that would normally round up to the next threshold and allowing consumer to think that they are saving money by perceiving less price.

5- Relative Savings-?Consumers are more likely to compare explicit value savings to the relative price of a product. In other words, buyers would rather save $25 on a $50 product than a $100 product since the savings percentages are 50% and 25% respectively. Regardless, the consumers are still technically saving $25 in both scenarios. Marketers use this tendency by using percentages of saving for higher-priced items and explicit discount amounts for lower-priced products. For example, you are more likely to see 10% off a RS 2000 Shirt, rather than RS200 off a RS2000 shirt. Lower-priced items like t-shirts will often be marketed as RS100 off RS500 shirts, rather than showing off in terms of percentage. We are more likely to compare explicit value saving to the relative price of a product. For Instance, consumers would rather save RS35 on a RS 60 product then RS 100 product since the saving % is more than 50% and more than 25% respectively. The customer is still saving more than 25% in both scenarios.

6-?Patterns: Making numbers easy to remember-?Pricing pattern can often catch the attention of the buyers, mainly when numbers consecutively increase, go down or let say the same.?Many of the prior research show that prices with identical digits, such as RS 111, are the most likely to be remembered in full. Because, it encourages the brain that the next few digits are even less important since they are lower than the left-most digit.

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