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Journal cover: European Journal of Marketing

European Journal of Marketing

ISSN: 0309-0566

Online from: 1967

Subject Area: Marketing

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Numerical encoding and odd-ending prices: The effect of a contrast in discount perception


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Title:Numerical encoding and odd-ending prices: The effect of a contrast in discount perception
Author(s):Nicolas Guéguen, (Université de Bretagne-Sud, IUT de Vannes – Département TC, Vannes, France), Patrick Legoherel, (Université d'Angers – LARGO, Département Esthua, Angers, France)
Citation:Nicolas Guéguen, Patrick Legoherel, (2004) "Numerical encoding and odd-ending prices: The effect of a contrast in discount perception", European Journal of Marketing, Vol. 38 Iss: 1/2, pp.194 - 208
Keywords:Consumer behaviour, Individual perception, Memory, Pricing policy
Article type:Research paper
DOI:10.1108/03090560410511186 (Permanent URL)
Publisher:Emerald Group Publishing Limited
Abstract:The practice of pricing with numbers ending in nine (“nine-ending”) has been little studied. It now seems well established that, under certain conditions, the practice of such pricing strategies has a particular effect on sales, especially inciting the customer to buy products that are more expensive. The research design for explaining such an effect would depend on the price encoding mechanisms, namely, the emphasis of focusing attention, which decreases when reading from left to right, leading to only partial memorization of the price. This would favour the leftmost digits, thus leading to errors of evaluation or estimation of the starting price. A new experiment was carried out to test this possibility. Subjects had to estimate the discount rate of products in a sale, according to whether the starting price was a “rounded” figure or “odd-ending”. Assuming the first digit of the price is memorized, we might expect that a round starting price leads to an overestimation of the amount of the offered discount. The results provide evidence in support of this hypothesis, enabling us to gain a more accurate knowledge of the processes used for estimating the starting price.



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