Price is the main purchasing factor. If possible, consumers tend to look for the lowest price when shopping for a product. But what if we said that some prices just feel right even if they are higher than others?
A study in the Journal of Consumer Research has shown an interesting result – consumers are drawn to prices with rounded numbers when the purchase is motivated by feelings.
To better explain, the study has shown that rounded prices (£100.00) encourage consumers to purchase a certain product more but only if the purchase is driven by inner feelings (e.g., buying a camera for a family vacation).
On the other hand, if the purchase is driven by a utilitarian reason, a non-rounded price (£98.76) is more effective.
Basically, as the authors of the study explained, ‘rounded prices lead to a subjective experience of feeling right’.
Are you a more hedonistic or a more utilitarian brand? If your products are usually bought to elicit pleasure or bring people closer together, then rounded pricing can be more effective for you. If your products have a clear utilitarian foundation yet still have many sensory features, then your pricing strategy could be more driven by the sales channel or the specific stockist.
How do you differentiate your pricing strategy based on the channel and purchase motivations? Do you use different pricing formats on airports and train stations versus your local stores? If you are selling luxury goods, then rounded pricing should be more effective. Yet, if you are in beauty, then your travelling customers might be more attracted to non-rounded prices.
Author: Alice Micheletti