We’re all probably not new to this, aware and all, but still we fall for it. Almost every time. It’s that effective!
As a consumer, I am price sensitive. And I usually look at the price tag, or ask the price, before I finally decide whether to buy the item or not.
Prices like PHP9.99, PHP99.95, PHP999.90, PHP1,499.99. It’s actually a marketing trick, or pricing trick, and a every effective one at that. And it has psychological basis that is why it is so effective in luring in more sales.
Just a few more centavos and its impact would have been different. Likely less sales and more wary buyers thinking twice before giving in.
Consumers generally do not like whole figures when it comes to prices, such as PHP10.00, PHP100.00, PHP1,000.00. We find it more expensive compared to prices such as PHP9.99, PHP99.95, PHP999.90. But in reality, they are just a few centavos different.
Such as in stocks, these round figures present a psychological barrier, may it be a resistance or major support line.
In pricing, one of marketing’s P’s, the psychological effect of these round numbers make the item seem like more expensive, but whereas if we see a series of 9’s even in centavos, we say “Oh it’s cheap, it’s less than 10 pesos! (or 100 or 1,000)” “Nice find! Bargain! PHP99 only!” We feel that it is less (which is true), we feel it’s cheaper, a bargain, advantageous find, but it’s actually our minds playing tricks on us.
Or sellers taking advantage of this psychological trick.
Mathematically, yes the 999 pricing is less, but not significantly less, just a few cents less. But psychologically, we don’t see it that way. It feels like it is a lot less, a lot cheaper. But if the price tag indicated a round number, will you think twice about buying the item? Will you feel differently? Well, I will.
My advice, next time, to my self, and to you, round it up. Round up the price and see the new price tag. Then assess again whether it’s within your willingness-to-buy.
Photo: New Price Red Tag by MarkMoz12