Question

Odd-even pricing is setting prices that end in certain numbers. For example, products selling below $50 often end in the number 5 or the number 9-such as 49 cents or $24.95. Prices for higher-priced products are often $1 or $2 below the next even dollar figure-such as $99 rather than $100.

Why do you think consumers will react better to a price that is $99 than $100?

What type of products typically utilizes Odd-even pricing?

Answer 1

When a consumer sees a product worth $99 vs $100, he/she will react better to the one that costs $99 because subconsciously, the consumer is convincing him/herself that the product is something less than $100 (he/she is sensitive to the last digits of the price). Although the difference is just $1, the consumer mind is convinced that the $99 product is still cheaper and is getting a good deal compared to the $100 product. Odd pricing often suggests bargain to the costumes and thus, they react better to a price that is $99 than $100.

Such type of pricing is used almost everywhere in advertising material. While odd pricing is used to indicate bargain to consumers, even pricing is used to indicate quality. It is very common to see products such as toys, clothing, shoes, etc use odd-pricing while many restaurants use even pricing strategy in order to indicate the high quality of their food.