Research participants were more inclined to buy Champagne if its price was a round number ($40 versus $39.72 or $40.28) but more inclined to buy a calculator if its price (the same numbers were used) wasn’t round, say Monica Wadhwa of INSEAD and Kuangjie Zhang of Nanyang Technological University in Singapore.

These and other findings suggest that marketers can benefit by setting rounded prices for feelings-driven purchases and nonrounded prices for purchases driven by cognition. The effects extend to performance perceptions: People believed that if a camera was to be used for a vacation, its pictures were better if its price was rounded, but if it was for a class, the pictures were better if the price was nonrounded.

(Source: Journal of Consumer Research)

Published in Dawn, Economic & Business, March 23rd , 2015

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