How do markets behave? The adjustment of price endings

Abstract

Purpose

Nominal prices are known to have a distinct impact on pricing, which is normally seen in the form of 9‐ending prices. This article aims to study the effect of nominal prices on pricing patterns using data from a real‐life experiment: the currency changeover to the euro.

Design/methodology/approach

The study examines quantitatively the impact of the euro changeover on the price endings used in grocery retailing.

Findings

The results show that the length of the price has a marked impact on price endings. The adjustment of price endings is also found to be a very slow process.

Research limitations/implications

The study examines pricing two different market situations within one industry (grocery retailing) in one country (Finland) and shows that there is a difference between pricing patterns in different market situations. It is clear that more research is needed to obtain a more detailed picture of pricing patterns by studying diverse market situations.

Originality/value

This article gives a better understanding of the effect of price length on price endings based on real‐life data sets from before and after the euro changeover. The results are robust because the studied markets and, thus, the culture remained the same over the study period. Further, this article for the first time examines the adjustment of price endings in a market change caused by a currency changeover.

Citation

Aalto‐Setala, V. (2005), "How do markets behave? The adjustment of price endings", Journal of Product & Brand Management, Vol. 14 No. 7, pp. 455-459. https://doi.org/10.1108/10610420510633404