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- Title
The Effects of Nine-ending Prices and the Need for Cognition in Price Cognition.
- Authors
Shih-Chieh Chuang; Chaang-Yung Kung; Yin-Hui Cheng; Shu-Li Yu
- Abstract
The use of nine-ending prices is popular among retailers. According to a previous report, 30% to 65% of all prices end in the digit nine, and evidence from an econometric analysis of UPC retail scanner data and surveys of retail price practices showed that consumers perceive nine-ending prices to be significantly lower than prices that are just one cent higher (Stiving and Winer, 1997; Schindler and Kirby, 1997; Thomas and Morwitz, 2005). This issue has attracted the interest of researchers since as early as 1936 (Ginzberg, 1936). More recently, Anderson and Simester (2003) suggested that the last digit of a price has a significant impact on receiving revenues, even though nine-ending prices change the price of products by just one cent. Although monetary promotions such as nine-ending prices cause consumers to purchase more, some research has suggested that the effect of such prices depends on the amount of attention that consumers pay to the decision to purchase (Shindler and Warren, 1988; Zaichkowski, 1988). The amount of attention is likely to be affected by a variety of factors, including consumer involvement, motivation, and the opportunity to process price information. Another important variable that has largely been ignored in the literature is the need for cognition (NFC), which may be a crucial element that affects consumer perceptions of nine-ending prices. This research investigates the NFC as a facet of consumer personality that reflects a tendency to engage in and even enjoy evaluating prices, as it motivates comparative thought. It is proposed that consumers with a high and low NFC will exhibit different consumer behavior. The research divides consumers into two price cognition groups: high and low price cognition. Two subsequent experiments using these groups revealed that consumers with a low NFC tend to perceive nine-ending prices to be significantly cheaper than zero-ending prices.
- Subjects
CONSUMER research; CUSTOMER satisfaction; PERSONNEL changes; RETAIL stores; ECONOMETRICS
- Publication
Advances in Consumer Research, 2009, Vol 36, p973
- ISSN
0098-9258
- Publication type
Article