My endeavor to branch out and sample other markting blogs has gone quite well. One of the first posts to really get me thinking was Nathan Bush of Another Advertising Wanker's post on the terminology of the word expensive. In most dictionaries expensive means that an item is basically high monetary cost for a consumer. Nathan's argument was that it should instead be high perceived monetary cost. I personally think it to be quite apt because the original definition wouldn't class a bread loaf that costs $100 as expensive and converesely a house being sold at half price would still be expensive. So I believe this change to be much more acurate.
The second thing I would like to bring up is that there was a study that was referenced in the TV show of the same name as this blog that stated that people did not trust whole value items and perceived that having a non flat value down to the last cent appeared more thought on and therefore was a better price.
Now what I'd like to raise is cobining the two for low value items. Personally I believe the more thought on price would work against the seller for low cost items especially in an environment where there are more expensive items. Personally I think a value such as $1 is not a high value. For me it is impulse. If I have that gold coin in my pocket if there's something I want I'll just get it.
Non-rounded cents to me appears more to be something that requires thought. You have to take it in and then think about it before you come to the conclusion that it does actually cost $1. Now this isn't a long process but it still subtracts time which hurts the chance of impulse buy.
Now this is jsut my view but what would you prefer? a $1 item or $0.99 item?
4 comments:
Well, it deprends. If I was walking down the street, not looking at anything in particular, my attention's probably caught more by a sign saying $1, than 99 cents... but if I'm walking down a supermarket isle, and shopping anyway, I already have a "price" mindset... if that makes sense. The mindset wherein I know I'm looking at prices. Hence, the 99 cents would catch my attention as being cheaper. (Not to mention in supermarkets it'd be displayed as 1.00, vs 0.99. As soon as I see the zero-point-something I think," Oh, that's cheap!" Whereas on the street you can just write $1, with a sharpie, which looks better than "99cents")
...people did not trust whole value items and perceived that having a non flat value down to the last cent appeared more thought on and therefore was a better price.
This was one of the thought processes that we went through, in deciding prices for Amaranth, actually. O.o; Not quite "exact cent," but, "exact dollar." A lot of thought went into the price, and we figured that potential consumers would also think that having such a non-flat figure would mean that we'd thought about the price thoroughly and ensured that those paying syndicate prices were getting the best value they could. And cents were just too messy to deal with. =/
Ah yes but one thing to remember about your supermarket shopping is that you're asian and therefore 1c difference is the be all and end all to you. Sad and perhaps a slight exaggeration but there is truth in it.
As for Amaranth you guys did actually have a good point with that. I didn't argue that the psychological element wouldn't work. I was simply stating that you were cutting ROI too much for the value added psychologically.
I mean when you think about it you have to have 1 in 35 people be finicky enough for that $2 margin to make the difference for it to be worth it. Whilst 35 people is a lot...$2 is a really small amount to get finicky over. So yes you do have psychology on your side...but to be honest 69 is just as psychic as 68. In fact you'd probably get some people going there just because it's $69.
Psychology works best when you know your customers/attendees which Amaranth does not.
Good point - I think this works for the value of a single currency value eg. $1, $2, $5 but not $3 or $4 - and this is exactly for what you said, the ease value. Today I had a $20 note. I was going to buy some rice paper rolls for $5.20 (which I was very much looking forward to) but opted for the less appealing wrap as it was a flat $5 - thus making the ease of transaction and storing change more appealing. Wierd... I know.
Yeah I think the being able to pay with a single coin or note and not having to worry about change really does help as well.
I do believe that on higher priced items going down to cents can work up until a point for making it thought out, but as you pointed out especially with low down values, playing with prices is just an inconvenience.
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