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Psychological, on one side. As you say, people see that $99.99 price and think "Hey, it's less than a hundred bucks!"
On the other side, a price ending in .99 generally represents a little extra markup. If the retailer calculates the selling price based on the cost and the desired markup and it comes up to something that ends in .83 (just as an example), they will often bump it up to .99 just to get a little gravy that the customer won't really notice.
Last edited by duster1979; 09-17-2014 at 02:05 PM..
Theres a lot of literature out there on this. Basically people will see 9.99 and equate that to nine dollars and change. Its psychological. Its the max you can charge for a 9 dollar item
The human brain ignores the last few numbers and only sees the first. So a car selling for 24,999 is a better deal than one selling for 25,000. The zeros do it.
Look at how house prices are referred to.
Hey this house is only 500k
Hey this house is HALF OF A MILLION DOLLARS.
But its a bargain at 500k
There is a vast body of research that goes into sales and marketing. Extensive research is done and updated constantly to determine what will (or won't) get consumers to spend. This is further broken down by a bewildering array of demographics so to make it easier to pick and choose a target market.
As others have stated by and large consumers prefer prices that end in ninety-nine cents. It seems a better bargain to most than prices ending in round numbers. This however is not universal; studies have shown that high end/luxury consumers respond more positively to rounded number prices and tend to associate "99" with lower quality and or down market goods.
For instance prices at Hermes, Louis Vuitton, and other TOL luxury goods are most always something like $200, $2000, $200, 000 and so forth.
Is it because someone will be more likely to buy an item priced $99.99 instead of $100.00, or is there some other reason?
to trick stupid people into buying them
its a marketing trick.
now that more and more people are wising up they try other things like 98.99/99.98 or something like that
doesn't work on strong willed people or at least slightly smarter people.
Some stupid people still think 99.99 = 99.00 though...
but 90% of the consumers I would think have now seen past it.
they may be affected by it still but they are MUCH more resistant to it.
PS marketers we know your tricks.
I for one cannot be tricked by you marketers, or extremely unlikely/rare...try as you may, it will be me tricking you
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