Page 379 - Foundations of Marketing

346 Part 4 | Product and Price Decisions

Odd-Number Pricing
Many retailers believe that consumers respond more positively to odd-number prices, such as
$ 4.99 , than to whole-dollar prices, such as $ 5 . Odd-number pricing is the strategy of setting
prices using odd numbers that are slightly below whole-dollar amounts. Nine and five are the
most popular ending figures for odd-number prices.
Sellers who use this strategy believe that odd-number prices increase sales because con-
sumers register the dollar amount, not the cents. The strategy is not limited to low-priced
items. Auto manufacturers may set the price of a car at $ 11,999 rather than $ 12,000 . Odd-
number pricing has been the subject of various psychological studies, but the results have been
inconclusive.

Multiple-Unit Pricing

Many retailers (and especially supermarkets) practice multiple-unit pricing , setting a single
price for two or more units of a product, such as two cans for 99 cents rather than 50 cents
per can. Especially for frequently purchased products, this strategy can increase sales through
encouraging consumers to purchase multiple units when they might otherwise have only pur-
odd-number pricing The chased one at a time. Customers who see the single price and who expect eventually to use
strategy of setting prices using more than one unit of the product will purchase multiple units.
odd numbers that are slightly
below whole-dollar amounts Reference Pricing
multiple-unit pricing The
strategy of setting a single price Reference pricing means pricing a product at a moderate level and positioning it next to a
for two or more units more expensive model or brand in the hope that the customer will use the higher price as a ref-
reference pricing Pricing a erence point (i.e., a comparison price). Because of the comparison, the customer is expected to
product at a moderate level and view the moderate price more favorably than he or she would if the product were considered
positioning it next to a more in isolation.
expensive model or brand
bundle pricing Packaging Bundle Pricing
together two or more
complementary products and Bundle pricing is the packaging together of two or more products, usually of a comple-
selling them for a single price mentary nature, to be sold for a single price. To be attractive to customers, the single

Bundle Pricing
Most providers of telecom- ILYES SASI/Alamy
munications services engage in
bundle pricing.

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