Alternative marketing thinking

iCONTRACT

The Psychology Of Discounts

All of us have grown up to believe a bit of trickery goes on when you see prices that end in 99s. New research may make us change this view as it shows that smaller the final digit on the right, and people perceive that the discount is smaller. “Right Digit Effect, as researchers Keith S. Coulter (Clark University) and Robin A. Coulter (University of Connecticut) call, throws up some interesting, alternative views on discounted prices. When the right digits are small, people perceive the discount to be larger than when the right digits are large. In other words, an item on sale for $211 from the original price of $222 is thought to be a better deal than an item on sale for $188 from an original price of $199, even though both discounts are $11. Further, the researchers found that when consumers view regular and sale prices with identical left digits, they perceive larger price discounts when the right digits are “small” — less than 5 — than when they are “large,” or, greater than 5. Read More.

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