I've wondered about this question for a while, thought this would be a good place to get some opinions. There is probably some market research out there, but how do consumers respond to these similar prices? Over the long term, does marking a product at these various levels actually make a difference on consumer perception of the price, and therefore affect purchases? $.95, $.99, $1.00 or $95, $99, $100 $195, $199, $200 Which is the best strategy? I realize some people will say $199 is the best because then people have the perception that its still $1xx instead of $2xx, but is this stuff proven?
of course it is, go into any supermarket and you will see most of their products are labeled .99 etc It makes the product look cheaper to the eye.
i go for 95 or 195 because as it gives hold for the buyer to calculate and see the difference and atleast save $5
people look at the first digit.. for example, 7.99 looks cheaper than 8.00 even thought the difference is only in cent.
At the end of the day it's the quality of the products that counts. Im willing to pay top dollar for top quality products even there is no 99 cents at the back
I understand that people look at the first digit, etc., that .99 looks cheaper etc., but as I mentioned in the post, does anyone have proof? I mean, sometimes I see $1.00 and say, wow, it's only $1.00. Sometimes I see $.99 and I may say, hm, those are two big numbers put together. So, my question was, is there evidence or a marketing report to verify it?
In response to How about when the products are very similar or undifferentiated. My question is simply when you have to price something, what standards are 'best practice.
I would say 1,95 would bring out the best buying chance, it gives such a feeling of being lower than 2 ..
If i were you and the product that im selling is similar to others and undifferentiated, i will follow the market and use the normal price. What i will do next is to make sure that there is an added value for the customers if they buy my product (that differentiate me with my competitors). Maybe you can give a free bonus or something or even better, you can give better service . Know your USP and it will make you stand out from the crowd. I dont know if this helps, hope it does.
walmart uses .97 , i kind of liked buying products with that just because 7 means luck lol! and i unno it just looks better on the sale board then .99 or .95 Tyler
$x.99 is the best for sales. I only sell stuff at even numbers because it becomes a pain to add up the profits otherwise..
Based purely on a retail observation: $1.00 is for convenience. People usually have a dollar, or at least do not have to get back a lot of change. It also is useful where people are buying many items, it keeps it to a simple number they can add up as they go a long. $.99 - psychological price for value (they are all psychological) but this is more for a one-off purchase of low-medium value. $14.99 looks good (on which note it's worth noting that being below the '5' mark in a range of figures is always nice to look at psychologically). e.g: set a price in ranges such as: 0-4.99 10-14.99 20-24.99 $.95 - this to me is generally use on expensive items. Again, linked to the comment above about the range. If I'm going to pay a lot of money, I'd rather pay $299.95 purely because its in the lower range of figures, and a bit futher away from $300 than $299.99. It can also be incoporated into the dollar part of the price too (e.g: $295.95) or just a round price of $295.00 So it depends in my view on what you're selling. Many products? Round figures are nice. You could incoporate a discount for bulk buying that ends in a psychological figure (e.g: $1.00 each, or 5 for $4.99) One product of low-medium price? Ending in a $.99 is nice Higher priced products? Make use of the 5. It's psychologically cheap, but more attractive (in terms of value for money, and also quality). A 5 somewhere looks nicer and somewhat more 'sexy' than a 4 which is a bit 'ugly' and jaggered. So $xx.95 or $xx5.95 is nice.
The experts say if the price ends in .99 it is a deal and if it ends in .00 it is a high end product.
Bottom line. In Internet Marketing $97 <---This is common price. The number 7 means a lot. It attracts a lot of sales. $97 sounds better than $100.
I totally agree. It's also commonly cited in Marketing courses. On the other side, I Never buy anything that ends in $97, unless I Really have to. It is Too ugly and what is sold by that price is generally of very low value, specially on the internet. IMO.
For some reason people are attached to numbers with the ending "7". Like 9.97 or 49.7. Strange, but thats what statistics say.
Like i said up top, .97 is the best, walmart is using it now, and yes its supposed to be better for sales aswell. Maybe because its newer? Since everyone is so used to .99 they just dont care anymore, just like a banner in the same area causes ad blindness(You forget that its there, dont look at it etc, just like the top ad in DP lol, but atleast it changes colors ) Tyler