Psychological pricing

Retail prices are often so-called psychological prices or odd prices: a
little less than a round number, e.g. $ 6.95. There is some evidence to
support the firm belief which exists amongst retailers that greater than
expected demand occurs at such prices. Theories about the cause include:

   * For simplicity the consumer ignores one or more of the least
     significant digits; amounts like $ 6 and $ 7 are more easily handled
     than $ 6.95, and ignoring part of a number is easier than proper
     rounding; this effect is enhanced when the cents are printed smaller.
     Even though the cents are seen and not totally ignored, they may
     subconsciously be partially ignored.

   * Psychological prices suggest to consumers that goods are marked at the
     lowest possible price.

   * Now that consumers are used to psychological prices, other prices look odd.

Another advantage is that in most cases the consumer does not hand over the
exact amount and therefore has to be given change. This reduces the risk of
personnel stealing from the shop owner by not recording a sale on the cash
register and pocketing the money, in the case that the customer does not
require a receipt.

It is said to have been invented in 1875 by Melville E. Stone, the publisher
of the Chicago Daily News, who introduced it in cooperation with his advertisers.

How to - Physics - History - Companies - Internet - Video Games - List of Phobias - September 11, 2001
Radio - Timelines - Chemistry - Genealogy - Family - Film - SARS - Cancer - Medicine - DVD - Calendar
Countries - Disease - Health Science - Dentistry - Economics - AIDS - Law - Autism - Statistics - Bible
Recipes - Architecture - Computers - History of the Internet - Personal computer - Apple Macintosh
War - Presidents of the United States - United States Constitution - Universe - Philosophy - Animals
Biology - United States Constitution - Marketing Topics - Sports - Television - History of Computing

Flights - Mobile Phones - Car Credit - Wedding rings - Art Prints