The picture is of a marina on Galveston Bay, Texas, where the tidal range is around 1’. The floating docks slide up and down those tall pylons. Seems a bit over the top doesn’t it? Actually it’s not – during a hurricane the storm surge can be 10’ and the last thing you want is the docks, and the boats moored to them, floating off into the sunset.
And now for something completely different…attractive pricing:
It’s become almost universal in retail pricing to use what is called 9-ending prices. This is part of a technique called odd-number pricing and it’s designed to suggest better value to a potential buyer.
I noticed on a recent trip to the USA that it is now so accepted that even in conversation people refer to the price they paid as, for instance, ‘forty-nine ninety-nine’ rather than fifty dollars. This becomes even more absurd when you realise that state sales tax is added at check-out so the item would have been $52.98 anyway!
Research suggests that the technique works. Tests have shown that sales can increase by as much as 8% when the price tag ends in .99. Weird but true.
Actually, it’s a bit more complex than that. For instance, it’s most advantageous when the nine-ending is used to drop a price from, say, £50 to £49.99. This is because your brain sees the initial pound figure first. The difference in value perception between, say, £31.99 and £32.00 is less significant although it still works to some extent.
There’s a new quirk in the USA – items on clearance are often priced with an eight-ending and this is, apparently, being picked up on by consumers. Items priced with 0.88 cent endings are becoming perceived as stock being sold off cheaply. No doubt in the future people will talk about having bought ‘88’goods.
Where I was brought up, Hong Kong, you needed to be very careful about pricing – ending a price with the number 4 would make the item un-buyable for some Chinese people because 4 has the same sound as death. If you were to be so foolish as to have the number 1 before the 4 it would be even worse – number 1 sounds like a guarantee to Chinese, so a short life would be guaranteed for any purchaser.
I used to sell big plant worth many millions of pounds and I’m sure that using odd-number pricing in that case would merely invite rye comment from a customer. When we started Salty John eight years ago I wished to avoid what I saw as a silly convention and wanted to price in round numbers, but I was eventually convinced by the research reports and decided to adopt something similar – our prices usually end in 0.95.
It offers a certain symmetry to the price lists – attractive pricing, if you like!