psychological pricing

(redirected from Odd pricing)

psychological pricing

an approach to PRICING which pays particular attention to the effect which a product's PRICE has upon consumers' perceptions of the product. This has a number of dimensions, including:
  1. the charging of very high prices for certain (generally high-quality) consumer products to convey an impression of product exclusiveness. High prices may appeal to particular high-income customers who wish to possess the product as a status symbol (‘conspicuous consumption’);
  2. the charging of high prices for technologically sophisticated consumer products in order to convey an impression of superior product quality and performance.

    This may play an important part in the buying decision when consumers are ignorant about the comparative properties of the brands of the product facing them, and thus use price as an indicator of quality;

  3. the charging of a price for a product which is just below a ‘round figure’ threshold price (for example 99 pence rather than £1) so as to create an impression that the product's price is considerably below the threshold;
  4. the charging of relatively low prices for frequently purchased and familiar products so as to create or reinforce an impression of value for money.
References in periodicals archive ?
Evidence of odd pricing can be traced back more than 100 years (Schindler, Wiman 1989).
Contrariwise, a new marketing tool as every innovation can cause distrust in odd pricing, due to insufficient experience of consumers.
The effect of odd pricing on demand, European-Journal of Marketing 31(11-12): 799-813.
Effect of odd pricing on choice of items from a menu, Advances in Consumer Research 15: 348-53.
Effects of odd pricing on price recall, Journal of Business Research 19(3): 165-77.
But some bloggers weren't impressed, citing security fears over fingerprints, odd pricing policy and lack of gamechanging technology.
These data are consistent with customary pricing, which has also been called psychological pricing (Friberg and Matha 2004; Kreul 1982) or odd pricing (Stiving and Winer 1997).
The practice of odd pricing in retailing is so prevalent that its efficacy is generally taken for granted.
One theory is that odd pricing originated after fixed pricing became the norm in the USA, shortly after the end of the Civil War.
Another commonly cited explanation for the introduction of odd pricing is that it arose as a measure to help combat theft by employees (Harper, 1966; Hogl, 1988; Sturdivant, 1970; Twedt, 1965).
Changes in retailing methods and technology mean that the conditions which stimulated the emergence of odd pricing no longer exist.
Not all foundries have ignored profitability, but a significant number have done so, as can be seen by industry statistics showing the number of foundries that have been or will be closed, and the rather odd pricing practices that prevail.