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Psychological pricing: Myth or reality? The impact of nine-ending prices on purchasing attitudes and brand revenue

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  • Ortega, Ana M.
  • Tabares, Felipe A.

Abstract

Price is the variable through which the value proposition of brands is monetize, therefore, it is the driver that guarantees the sustainability and profitability of companies. Among different psychological pricing tactics that exist, prices ending in nine are the most accepted and used by practitioners as a strategy to penetrate markets; but this strategy should be carefully revised and applied as it is context dependent and has differential effects among categories and types of brands. Drawing on the importance of psychological pricing, the extended use of nine-ending prices and the identified need of a better understanding, this study validates the impact of such prices on the purchasing attitudes of consumers and the differentiated effect on revenue, among various brands and product categories, finding that this tactic significantly affects consumers' purchasing attitudes and brands’ revenue levels, but to a different extent, depending on the product category, the brand positioning and preference.

Suggested Citation

  • 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).
    • Handle: RePEc:eee:joreco:v:71:y:2023:i:c:s0969698922002995
    DOI: 10.1016/j.jretconser.2022.103206
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    References listed on IDEAS

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    Cited by:

    1. Magdalena Schindl & Felix Reichel, 2024. "Spatial Competition on Psychological Pricing Strategies: Preliminary Evidence from an Online Marketplace," Papers 2411.07808, arXiv.org, revised Nov 2024.

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