Product Category Pricing and Future Price Attractiveness: 99-Ending Pricing in a Memory-Based Context

• Published in: Journal of retailing Vol. 88; no. 4; pp. 497 - 511
• Main Authors: Carver, James R., Padgett, Daniel T.
• Format: Journal Article
• Language: English
• Published: Greenwich Elsevier Inc 01-12-2012; Elsevier Limited
• Subjects: 99-ending pricing; Accuracy; Assimilation/contrast theory; Hypotheses; Market prices; Memory-based; Price comparisons; Prices; Pricing policies; Product recalls; Range theory; Retail stores; Retailing; Shopping; Studies; Memory-based; Assimilation/contrast theory; 99-ending pricing; Price comparisons; Range theory
• ISSN: 0022-4359; 1873-3271
• DOI: 10.1016/j.jretai.2012.05.001

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► 99-ending pricing distorts memory-based comparisons with a multiple product set. ► New prices above range are less attractive when highest price in range is 99-ending. ► New prices below range are less attractive when lowest price in range is 99-ending. ► New prices within range show no 99-ending price effects. ► Results consistent with assimilation/contrast approach based on left-digit effects.
Two experiments were used to examine the impact of 99-ending pricing on memory-based comparisons with a multiple product set. Results indicate that when a target is priced above/below a stimulus set, use of 99-ending prices for the highest and lowest prices in the stimulus set lessens target price attractiveness compared to when the highest and lowest prices are 00-ending. Attractiveness of targets priced within the stimulus set was not impacted by the use of 99- versus 00-ending pricing. Overall, participants appear to use an assimilation/contrast approach based upon left-digit processing in determining target price attractiveness.