Pricing Psychology- Small & Big sounding prices
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Pricing ·
Jan 17, 2010 | 0 Comments
Keith Coulter and Robin Coulter have published various papers on Pricing Psychology, a topic I have spent a fair bit of time thinking about.
Keith Coulter and Robin Coulter have published various papers on Pricing Psychology, a topic I have spent a fair bit of time thinking about.
From one of their papers called The paper is called Distortion of Price Discount Perceptions: The Right Digit Effect
Some key ideas from that paper via science daily:
- When the right digits are small, people perceive the discount to be larger than when the right digits are large. In other words, an item on sale for $211 from the original price of $222 is thought to be a better deal than an item on sale for $188 from an original price of $199, even though both discounts are $11.
- When consumers view regular and sale prices with identical left digits, they perceive larger price discounts when the right digits are "small" -- less than 5 -- than when they are "large," or, greater than 5.
- When consumers examine multi-digit regular and sale prices in an advertisement, they read those prices from left-to-right. If the left (hundreds) digits are identical, consumers will pay less attention to those digits, and instead will focus primarily upon the disparate right-most (tens and units) digits in the price comparison process
A few more ideas, in a new paper to be published soon and highlighted by NY Times:
- Back-of-the-mouth vowels like the “o” in “two” make people think of large sizes, whereas people associate front-of-the-mouth vowels like “ee” with diminutiveness. In one experiment, researchers told consumers the regular and sale prices of a product, asked them to repeat the sale price to themselves, and then, a few minutes later, told them to estimate the size of the discount in percentage terms. Products with “small-sounding” sale prices (like $2.33) seemed like better deals than products with “big-sounding” sales prices (like $2.22). In another experiment, the researchers used a pair of sale prices — $7.88, which sounds “big” in English, and $7.01, which sounds “small” — but are the other way around in Chinese.
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