Do you think you'd be more inclined to buy a product priced at $3.99 than one that sells for $4?
I can picture many of you shaking your heads.
According to various studies in consumer behavior, people are far more likely to buy a product when the price ends in .99.
But why?
For one, consumers tend to read from left to right, which means our attention becomes fixated on the first number as opposed to the ones that follow. Even though you're hardly getting a greater bargain by opting for something priced a cent cheaper (especially since taxes come into play), your indifference to reading the whole way across actually fools you into thinking you are snagging a deal.
It's as though we're comparing something priced at $3 to something that costs $4. It doesn't make much logical sense, but most consumers will do anything to expend the least amount of brainpower possible, especially when pressed for time.
In addition, shoppers tend to deem prices ending in cents -- whether .99, .50, or .25 -- as being discounted. Perhaps we're so used to thinking of whole numbers as complete or full that when we see cents in the price, we think we must be getting some sort of a deal.
Now, which item a consumer will ultimately choose may depend on how budget-conscious he or she is. For example, a person looking to save money may very well opt for the cheaper item, while someone who associates a higher price with better quality might decide to purchase the more expensive item.
There you have it. Although psychological pricing often goes unnoticed, it's an effective way on the part of retailers to induce shoppers to open their wallets.
Have you ever fallen for this marketing tactic? Did you know of it before? If no, do you plan to pay more attention to prices the next time you're at the store?
I can picture many of you shaking your heads.
According to various studies in consumer behavior, people are far more likely to buy a product when the price ends in .99.
But why?
For one, consumers tend to read from left to right, which means our attention becomes fixated on the first number as opposed to the ones that follow. Even though you're hardly getting a greater bargain by opting for something priced a cent cheaper (especially since taxes come into play), your indifference to reading the whole way across actually fools you into thinking you are snagging a deal.
It's as though we're comparing something priced at $3 to something that costs $4. It doesn't make much logical sense, but most consumers will do anything to expend the least amount of brainpower possible, especially when pressed for time.
In addition, shoppers tend to deem prices ending in cents -- whether .99, .50, or .25 -- as being discounted. Perhaps we're so used to thinking of whole numbers as complete or full that when we see cents in the price, we think we must be getting some sort of a deal.
Now, which item a consumer will ultimately choose may depend on how budget-conscious he or she is. For example, a person looking to save money may very well opt for the cheaper item, while someone who associates a higher price with better quality might decide to purchase the more expensive item.
There you have it. Although psychological pricing often goes unnoticed, it's an effective way on the part of retailers to induce shoppers to open their wallets.
Have you ever fallen for this marketing tactic? Did you know of it before? If no, do you plan to pay more attention to prices the next time you're at the store?
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