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As consumers spend more time online—frequently researching, discussing and even directly purchasing consumer goods ranging from household and personal-care items to apparel and consumer electronics—efforts by marketers to reach these consumers when and where they shop have lagged. In an Economist Intelligence Unit global survey of business professionals from CG companies, respondents cited three traditional marketing activities—in-store marketing (73%), co-marketing with retail partners (61%) and print/television ads (60%)—as most important for consumer engagement. Marketers appear ready to pick up the digital pace, however. Seventy-three percent of respondents say social media will be an important part of consumer engagement over the. | Marketing Bulletin 1997 8 53-58 Research Note 1 The Widespread Use of Odd Pricing in the Retail Sector Judith Holdershaw Philip Gendall and Ron Garland All home-drop advertising material and all advertising displayed in two free weekly newspapers and the local daily Manawatu Evening Standard was analysed over a seven day period to identify the prevalence of odd pricing. Each advertisement was analysed on the basis of the right-most digit displayed. In other words if cents endings were used the analysis was based on the cents ending regardless of the whole dollar amounts shown. In the case of whole dollar amounts again the analysis was based on the last digit or lowest dollar numeral. An analysis of 840 advertisements revealed that odd prices in particular prices ending in the digit 9 clearly outnumbered all other price endings. In total 87 of prices were defined as odd prices. Approximately 60 of prices ended in the digit 9 with a further 30 of prices ending in the digit 5. Thus approximately 90 of prices ended in either 9 or 5 . Three digits 0 5 9 accounted for nearly 97 of price endings with the remaining seven digits accounting for only slightly over 3 . Whatever pricing methods retailers use there is a definite bias in favour of odd price endings. Keywords odd pricing psychological pricing Introduction Casual observation of advertised retail prices throughout New Zealand highlights the prolific use of odd pricing the practice of pricing just below the nearest round number for example 9.99 instead of 10.00 or 99.95 instead of 100 . The popularity of prices ending in the digit 9 and to a lesser extent the digit 5 reflects the belief that odd pricing will produce higher than expected demand at the price level concerned. In other words the assumed demand curve is thought to be kinked upwards at odd price points. Odd prices also referred to in the literature as magic prices charm prices psychological prices irrational prices intuitive prices or rule-of-thumb prices
