Patterns of price endings used in US and Japanese price advertising

Abstract

Purpose The purpose of this paper is to guide managers' choices of rightmost digits in retail prices by acquiring a better understanding of the psychological mechanisms by which price endings can influence sales. Design/methodology/approach The paper observes and compares the price endings used in large matched samples of advertised prices in two countries with considerable cultural differences, the USA and Japan. Findings Although the digit 9 predominates among the rightmost digits of advertised prices in the USA the digit 8 predominates in Japan. In contrast to this difference, the US and Japanese prices are similar in that both show greater use of 9 or 8 endings when this choice lowers the price's leftmost digit and when the advertised price is claimed to be a discount price. Research limitations/implications Future research should include a wider range of price advertising media and should examine usage patterns of less frequently occurring digits. Practical implications Setting a price that falls just below a round number can be helpful in creating a low‐price image. Setting this just‐below price with a 9‐ending would be appropriate in the USA and European countries, but in Japan and other Asian countries, it would be more appropriate to set this just‐below price with an 8‐ending. Originality/value These results provide guidance to the retail price setter and illustrate to the basic researcher how universal psychological processes and specific cultural meanings can interact to determine consumer perceptions of marketing stimuli.

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