IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v61y2021ics0969698921001569.html
   My bibliography  Save this article

Consistent price endings increase consumers perceptions of cheapness

Author

Listed:
  • Hung, Hui-Hsi
  • Cheng, Yin-Hui
  • Chuang, Shih-Chieh
  • Yu, Annie Pei-I
  • Lin, Yu-Ting

Abstract

Should marketers make the last digit of a sale price consistent with that of its original price? Across multiple studies, including field studies and studies using student and non-student samples and various product categories, this research shows that price perception and purchase intention are related to consistency between the sale price and original price. The price perception of the deduction is moderated by the consistency between the final digit in the prices. First, consumers perceive sale prices as cheaper and have a higher purchase intention when the rightmost digit in a sale price is the same as in the original price—a phenomenon this study refers to as the “consistent ending price effect.†Second, the consistent ending price effect occurs when prices are at least three digits long, but not for two-digit prices. Finally, the study demonstrates the mediating role of processing fluency in the link between consistent ending price and price perception.

Suggested Citation

  • Hung, Hui-Hsi & Cheng, Yin-Hui & Chuang, Shih-Chieh & Yu, Annie Pei-I & Lin, Yu-Ting, 2021. "Consistent price endings increase consumers perceptions of cheapness," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:joreco:v:61:y:2021:i:c:s0969698921001569
    DOI: 10.1016/j.jretconser.2021.102590
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969698921001569
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretconser.2021.102590?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. Jimmy Q. Li & Paat Rusmevichientong & Duncan Simester & John N. Tsitsiklis & Spyros I. Zoumpoulis, 2015. "The Value of Field Experiments," Management Science, INFORMS, vol. 61(7), pages 1722-1740, July.
    2. Bell, David R & Bucklin, Randolph E, 1999. "The Role of Internal Reference Points in the Category Purchase Decision," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 26(2), pages 128-143, September.
    3. Cheng, Yin-Hui & Chuang, Shih-Chieh & Pei-I Yu, Annie & Lai, Wan-Ting, 2019. "Change in your wallet, change your choice: The effect of the change-matching heuristic on choice," Journal of Retailing and Consumer Services, Elsevier, vol. 49(C), pages 67-76.
    4. Wong, Kin Fai Ellick & Kwong, Jessica Yuk Yee, 2000. "Is 7300 m Equal to 7.3 km? Same Semantics but Different Anchoring Effects," Organizational Behavior and Human Decision Processes, Elsevier, vol. 82(2), pages 314-333, July.
    5. Liefeld, John & Heslop, Louise A, 1985. "Reference Prices and Deception in Newspaper Advertising," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 11(4), pages 868-876, March.
    6. Lichtenstein, Donald R & Burton, Scot & Karson, Eric J, 1991. "The Effect of Semantic Cues on Consumer Perceptions of Reference Price Ads," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 18(3), pages 380-391, December.
    7. Gurumurthy Kalyanaram & Russell S. Winer, 1995. "Empirical Generalizations from Reference Price Research," Marketing Science, INFORMS, vol. 14(3_supplem), pages 161-169.
    8. Chia-Jung Chang, 2013. "Price or quality? The influence of fluency on the dual role of price," Marketing Letters, Springer, vol. 24(4), pages 369-380, December.
    9. 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.
    10. Winer, Russell S, 1986. "A Reference Price Model of Brand Choice for Frequently Purchased Products," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 13(2), pages 250-256, September.
    11. Manoj Thomas & Vicki Morwitz, 2005. "Penny Wise and Pound Foolish: The Left-Digit Effect in Price Cognition," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 32(1), pages 54-64, June.
    12. Hao Shen & Yuwei Jiang & Rashmi Adaval, 2010. "Contrast and Assimilation Effects of Processing Fluency," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 36(5), pages 876-889, February.
    13. Christina Kan & Donald R. Lichtenstein & Susan Jung Grant & Chris Janiszewski, 2014. "Strengthening the Influence of Advertised Reference Prices through Information Priming," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 40(6), pages 1078-1096.
    14. 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.
    15. Rajesh Bagchi & Derick F. Davis, 2012. "$29 for 70 Items or 70 Items for $29? How Presentation Order Affects Package Perceptions," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 39(1), pages 62-73.
    16. Krishnamurthi, Lakshman & Mazumdar, Tridib & Raj, S P, 1992. "Asymmetric Response to Price in Consumer Brand Choice and Purchase Quantity Decisions," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 19(3), pages 387-400, December.
    17. David R. Bell & James M. Lattin, 1998. "Shopping Behavior and Consumer Preference for Store Price Format: Why “Large Basket” Shoppers Prefer EDLP," Marketing Science, INFORMS, vol. 17(1), pages 66-88.
    18. Manoj Thomas & Daniel H. Simon & Vrinda Kadiyali, 2010. "The Price Precision Effect: Evidence from Laboratory and Market Data," Marketing Science, INFORMS, vol. 29(1), pages 175-190, 01-02.
    19. 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.
    20. Feng, Shan & Suri, Rajneesh & Chao, Mike Chen-Ho & Koc, Umit, 2017. "Presenting comparative price promotions vertically or horizontally: Does it matter?," Journal of Business Research, Elsevier, vol. 76(C), pages 209-218.
    21. Niedrich, Ronald W & Sharma, Subhash & Wedell, Douglas H, 2001. "Reference Price and Price Perceptions: A Comparison of Alternative Models," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 28(3), pages 339-354, December.
    22. Himanshu Mishra & Arul Mishra & Dhananjay Nayakankuppam, 2006. "Money: A Bias for the Whole," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 32(4), pages 541-549, March.
    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. Dogerlioglu-Demir, Kivilcim & Akpinar, Ezgi & Gurhan-Canli, Zeynep & Koçaş, Cenk, 2022. "Are 1-endings the new 9-endings? An alternative for generating price discount perceptions," 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. Santana, Shelle & Thomas, Manoj & Morwitz, Vicki G., 2020. "The Role of Numbers in the Customer Journey," Journal of Retailing, Elsevier, vol. 96(1), pages 138-154.
    2. Carver, James R. & Padgett, Daniel T., 2012. "Product Category Pricing and Future Price Attractiveness: 99-Ending Pricing in a Memory-Based Context," Journal of Retailing, Elsevier, vol. 88(4), pages 497-511.
    3. 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.
    4. Nicole Koschate-Fischer & Katharina Wüllner, 2017. "New developments in behavioral pricing research," Journal of Business Economics, Springer, vol. 87(6), pages 809-875, August.
    5. 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.
    6. Lillian L. Cheng & Kent B. Monroe, 2013. "An appraisal of behavioral price research (part 1): price as a physical stimulus," AMS Review, Springer;Academy of Marketing Science, vol. 3(3), pages 103-129, September.
    7. Levy, Daniel & Snir, Avichai & Gotler, Alex & Chen, Haipeng (Allan), 2020. "Not all price endings are created equal: Price points and asymmetric price rigidity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue forthcomi.
    8. Chandrashekaran, Rajesh & Grewal, Dhruv, 2006. "Anchoring effects of advertised reference price and sale price: The moderating role of saving presentation format," Journal of Business Research, Elsevier, vol. 59(10-11), pages 1063-1071, October.
    9. Moon, Sangkil & Voss, Glenn, 2009. "How do price range shoppers differ from reference price point shoppers?," Journal of Business Research, Elsevier, vol. 62(1), pages 31-38, January.
    10. 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.
    11. Hsin‐Hui Lin & Pin‐Han Chen & Chih‐Lun Wu, 2023. "Exploring the price anchoring effect in mobile commerce: An experimental study," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1601-1623, April.
    12. Manoj Thomas, 2013. "Commentary on behavioral price research: the role of subjective experiences in price cognition," AMS Review, Springer;Academy of Marketing Science, vol. 3(3), pages 141-145, September.
    13. Wolk, Agnieszka & Spann, Martin, 2008. "The effects of reference prices on bidding behavior in interactive pricing mechanisms," Journal of Interactive Marketing, Elsevier, vol. 22(4), pages 2-18.
    14. Asmus Olsen, 2013. "The politics of digits: evidence of odd taxation," Public Choice, Springer, vol. 154(1), pages 59-73, January.
    15. Robert M. Schindler & Mathew S. Isaac & Rebecca Jen-Hui Wang, 2023. "Strategic use of just-below numbers in packaged-foods calorie information," Marketing Letters, Springer, vol. 34(2), pages 237-250, June.
    16. Prakash, David & Spann, Martin, 2022. "Dynamic pricing and reference price effects," Journal of Business Research, Elsevier, vol. 152(C), pages 300-314.
    17. 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.
    18. Macé, Sandrine, 2012. "The Impact and Determinants of Nine-Ending Pricing in Grocery Retailing," Journal of Retailing, Elsevier, vol. 88(1), pages 115-130.
    19. Banerjee, Prantosh J. & Tripathi, Sanjeev & Sahay, Arvind, 2016. "When less is better than more: Just-below discount in tensile price promotions," Journal of Retailing and Consumer Services, Elsevier, vol. 31(C), pages 93-102.
    20. David R. Bell & James M. Lattin, 2000. "Looking for Loss Aversion in Scanner Panel Data: The Confounding Effect of Price Response Heterogeneity," Marketing Science, INFORMS, vol. 19(2), pages 185-200, May.

    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:joreco:v:61:y:2021:i:c:s0969698921001569. 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: https://www.journals.elsevier.com/journal-of-retailing-and-consumer-services .

    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.