IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v136y2021icp356-365.html
   My bibliography  Save this article

The not-so-odd couple: Odd pricing in a luxury context

Author

Listed:
  • Fraccaro, Annalisa
  • Macé, Sandrine
  • Parguel, Béatrice

Abstract

Two large samples of prices indicate that odd prices (i.e., prices just below a round number, for example €1495 vs. €1500) are used in the pricing of luxury products. An analysis of price endings suggests that luxury brand managers rely less on the drop-off mechanism than on the meaning mechanism, both of which have been used to show that odd prices influence consumers in the Fast-Moving Consumer Goods (FMCG) industry. Building on the odd-ending price justification effect, a conjoint analysis, indicating that a large proportion of luxury consumers prefer odd prices, supports the likely role of a guilt-relief mechanism in the pricing of luxury products.

Suggested Citation

  • Fraccaro, Annalisa & Macé, Sandrine & Parguel, Béatrice, 2021. "The not-so-odd couple: Odd pricing in a luxury context," Journal of Business Research, Elsevier, vol. 136(C), pages 356-365.
    • Handle: RePEc:eee:jbrese:v:136:y:2021:i:c:p:356-365
    DOI: 10.1016/j.jbusres.2021.07.048
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296321005440
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2021.07.048?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Uche Okonkwo, 2007. "Luxury Fashion Branding," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-59088-5, March.
    2. Marcus T. Allen & William H. Dare, 2004. "The Effects of Charm Listing Prices on House Transaction Prices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 32(4), pages 695-713, December.
    3. Parguel, Béatrice & Delécolle, Thierry & Valette-Florence, Pierre, 2016. "How price display influences consumer luxury perceptions," Journal of Business Research, Elsevier, vol. 69(1), pages 341-348.
    4. Drazen Prelec & George Loewenstein, 1998. "The Red and the Black: Mental Accounting of Savings and Debt," Marketing Science, INFORMS, vol. 17(1), pages 4-28.
    5. C. K. Prahalad & Richard A. Bettis, 1986. "The dominant logic: A new linkage between diversity and performance," Strategic Management Journal, Wiley Blackwell, vol. 7(6), pages 485-501, November.
    6. Raghubir, Priya, 2006. "An information processing review of the subjective value of money and prices," Journal of Business Research, Elsevier, vol. 59(10-11), pages 1053-1062, October.
    7. Lee, Jung Eun & Watkins, Brandi, 2016. "YouTube vloggers' influence on consumer luxury brand perceptions and intentions," Journal of Business Research, Elsevier, vol. 69(12), pages 5753-5760.
    8. Béatrice Parguel & Thierry Delécolle & Pierre Valette-Florence, 2016. "How price display influences consumer luxury perceptions," Post-Print hal-01819615, HAL.
    9. Yi, Sunghwan & Baumgartner, Hans, 2011. "Coping with guilt and shame in the impulse buying context," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 458-467, June.
    10. Jeff Brazell & Christopher Diener & Ekaterina Karniouchina & William Moore & Válerie Séverin & Pierre-Francois Uldry, 2006. "The no-choice option and dual response choice designs," Marketing Letters, Springer, vol. 17(4), pages 255-268, December.
    11. Schindler, Robert M & Kirby, Patrick N, 1997. "Patterns of Rightmost Digits Used in Advertised Prices: Implications for Nine-Ending Effects," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 24(2), pages 192-201, September.
    12. Gilles Laurent & Bernard Dubois, 1996. "The Functions of Luxury: A Situational Approach to Excursionism," Post-Print hal-00458452, HAL.
    13. Mark Stiving, 2000. "Price-Endings When Prices Signal Quality," Management Science, INFORMS, vol. 46(12), pages 1617-1629, December.
    14. Catherine Janssen & Joëlle Vanhamme & Adam Lindgreen & Cécile Lefebvre, 2014. "The Catch-22 of Responsible Luxury: Effects of Luxury Product Characteristics on Consumers’ Perception of Fit with Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 119(1), pages 45-57, January.
    15. Stiving, Mark & Winer, Russell S, 1997. "An Empirical Analysis of Price Endings with Scanner Data," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 24(1), pages 57-67, June.
    16. Rook, Dennis W, 1987. "The Buying Impulse," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 14(2), pages 189-199, September.
    17. Inman, J Jeffrey & McAlister, Leigh & Hoyer, Wayne D, 1990. "Promotion Signal: Proxy for a Price Cut?," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 17(1), pages 74-81, June.
    18. Béatrice Parguel & B Delecolle & Pierre Valette-Florence, 2016. "How price display influences consumer luxury perceptions," Post-Print halshs-01374021, HAL.
    19. Vecchiato, Riccardo, 2017. "Disruptive innovation, managerial cognition, and technology competition outcomes," Technological Forecasting and Social Change, Elsevier, vol. 116(C), pages 116-128.
    20. Schindler, Robert M. & Wiman, Alan R., 1989. "Effects of odd pricing on price recall," Journal of Business Research, Elsevier, vol. 19(3), pages 165-177, November.
    21. Kastanakis, Minas N. & Balabanis, George, 2012. "Between the mass and the class: Antecedents of the “bandwagon” luxury consumption behavior," Journal of Business Research, Elsevier, vol. 65(10), pages 1399-1407.
    22. Dall'Olmo Riley, Francesca & Pina, José M. & Bravo, Rafael, 2013. "Downscale extensions: Consumer evaluation and feedback effects," Journal of Business Research, Elsevier, vol. 66(2), pages 196-206.
    23. Anthony D. Miyazaki & Dhruv Grewal & Ronald C. Goodstein, 2005. "The Effect of Multiple Extrinsic Cues on Quality Perceptions: A Matter of Consistency," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 32(1), pages 146-153, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ortega, Ana M. & Tabares, Felipe A., 2023. "Psychological pricing: Myth or reality? The impact of nine-ending prices on purchasing attitudes and brand revenue," Journal of Retailing and Consumer Services, Elsevier, vol. 71(C).
    2. Béatrice Parguel & Annalisa Fraccaro & Sandrine Macé, 2022. "Terminaison du prix dans le luxe : du mythe à la réalité," Post-Print lirmm-03912106, HAL.
    3. Nishio, Kazuki & Hoshino, Takahiro, 2022. "Joint modeling of effects of customer tier program on customer purchase duration and purchase amount," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Annalisa Fraccaro & Sandrine Macé & Béatrice Parguel, 2021. "The not-so-odd couple: Odd pricing in a luxury context," Post-Print halshs-03503449, HAL.
    2. Béatrice Parguel & Annalisa Fraccaro & Sandrine Macé, 2021. "Compromise pricing in luxury," Post-Print halshs-03503443, HAL.
    3. Sharma, Amalesh & Soni, Mauli & Borah, Sourav Bikash & Haque, Tanjum, 2022. "From silos to synergies: A systematic review of luxury in marketing research," Journal of Business Research, Elsevier, vol. 139(C), pages 893-907.
    4. Mohamed Didi Alaoui, 2020. "L’effet d’adéquation entre la forme de présentation du prix et de la distance temporelle sur les réponses du consommateur : une approche par la théorie des niveaux de représentation," Post-Print hal-02870097, HAL.
    5. Ko, Eunju & Costello, John P. & Taylor, Charles R., 2019. "What is a luxury brand? A new definition and review of the literature," Journal of Business Research, Elsevier, vol. 99(C), pages 405-413.
    6. Macé, Sandrine, 2012. "The Impact and Determinants of Nine-Ending Pricing in Grocery Retailing," Journal of Retailing, Elsevier, vol. 88(1), pages 115-130.
    7. Kapferer, Jean-Noël & Valette-Florence, Pierre, 2018. "The impact of brand penetration and awareness on luxury brand desirability:," Journal of Business Research, Elsevier, vol. 83(C), pages 38-50.
    8. Cardella, Eric & Seiler, Michael J., 2016. "The effect of listing price strategy on real estate negotiations: An experimental study," Journal of Economic Psychology, Elsevier, vol. 52(C), pages 71-90.
    9. Shukla, Paurav & Rosendo-Rios, Veronica & Khalifa, Dina, 2022. "Is luxury democratization impactful? Its moderating effect between value perceptions and consumer purchase intentions," Journal of Business Research, Elsevier, vol. 139(C), pages 782-793.
    10. Holmqvist, Jonas & Wirtz, Jochen & Fritze, Martin P., 2020. "Luxury in the digital age: A multi-actor service encounter perspective," Journal of Business Research, Elsevier, vol. 121(C), pages 747-756.
    11. Eli Beracha & Michael Seiler, 2014. "The Effect of Listing Price Strategy on Transaction Selling Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 49(2), pages 237-255, August.
    12. Eric Anderson & Duncan Simester, 2003. "Effects of $9 Price Endings on Retail Sales: Evidence from Field Experiments," Quantitative Marketing and Economics (QME), Springer, vol. 1(1), pages 93-110, March.
    13. Marcial López-Pastor & Jesús García-Madariaga & Joaquín Sánchez & Jose Figueiredo, 2020. "Demand Impact for Prices Ending with “9” and “0” in Online and Offline Consumer Goods Retail Trade Channels," International Review of Management and Marketing, Econjournals, vol. 10(6), pages 58-78.
    14. Chen, Ning & Petersen, Francine E. & Lowrey, Tina M., 2022. "The effect of altruistic gift giving on self-indulgence in affordable luxury," Journal of Business Research, Elsevier, vol. 146(C), pages 84-94.
    15. Jeong, Ji Youn & Crompton, John L., 2018. "Do subjects from high and low context cultures attribute different meanings to tourism services with 9-ending prices?," Tourism Management, Elsevier, vol. 64(C), pages 110-118.
    16. Pillai, Kishore Gopalakrishna & Nair, Smitha R., 2021. "The effect of social comparison orientation on luxury purchase intentions," Journal of Business Research, Elsevier, vol. 134(C), pages 89-100.
    17. Mbaye Fall Diallo & Norchène Ben Dahmane Mouelhi & Mahesh Gadekar & Marie Schill, 2021. "CSR Actions, Brand Value, and Willingness to Pay a Premium Price for Luxury Brands: Does Long-Term Orientation Matter?," Journal of Business Ethics, Springer, vol. 169(2), pages 241-260, March.
    18. 'Phil' Klaus, Philipp & Tarquini-Poli, Annalisa & Ahmed Mostafa Alawad, Nawal, 2022. "Lifestyle of the rich and famous: Exploring the ultra-high net-worth individuals’ customer experience (UHCX)," Journal of Business Research, Elsevier, vol. 147(C), pages 49-58.
    19. Ian Yeoman & Una McMahon-Beattie, 2018. "The future of luxury: mega drivers, new faces and scenarios," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 17(4), pages 204-217, August.
    20. Jan Wieseke & Anika Kolberg & Laura Marie Schons, 2016. "Life could be so easy: the convenience effect of round price endings," Journal of the Academy of Marketing Science, Springer, vol. 44(4), pages 474-494, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:136:y:2021:i:c:p:356-365. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.