round price endings - rof's | a place to share · 2016. 11. 9. · round price endings...
TRANSCRIPT
Round Price Endings
Wieseke, Kolberg, & Schons (2016)
W. Rofianto
Research Background
Traditional marketing theory posits that prices ending in 9 or 99,
“just-below” prices, increase sales (e.g., Bhattacharya et al. 2012).
However, a current trend among retailers is to use round prices.
(e.g., www.dollartree.com; www.poundworld.net), it can also be
observed with some supermarkets use round prices for special
promotions (e.g., www.tesco.com; www.7eleven.com)
“it is interesting that a strategy so
widely used and accepted by
merchants and academicians has so
little proof behind it” (Holloway 1973,
p. 77). Quite surprisingly, even after 40
years this observation still holds true
Purpose of The Study
1. Test effect of different price endings on actual sales
2. Test perceptions of different price endings
3. Test whether round prices are inherently more convenient
4. Combine effects in a path model and show general
relationships
Results: Study 1
Results: Study 4
Results: Study 4
Managerial Implications
1. Over recent decades, life in industrialized countries has
changed in ways that enhance convenience consciousness.
Finding new ways of increasing convenience is imperative—
especially for traditional brick-and-mortar retailers
2. Retailers should use round prices if the purchase situation
creates a high need for convenience (cafeterias, and other
locations where customers are in a hurry, like airports, gas
stations, and typical convenience stores
3. Precise prices are generally inferior to just-below and round
prices