Complete Guide To Odd-Even Pricing
It's an odd-even pricing strategy based on the belief that some price points or price ranges appeal to a specific group of buyers.
Pricing a product at $19.95 rather than $20 gives the impression that it is in the "teen ranges" rather than the "twenty ranges."Customer perception of lower prices is a result of this.
Businesses that want to be perceived as discount retailers should use odd-numbered prices as a pricing cue to entice customers.
Price ending in 1,3,5,7,9 just below the round number is known as "odd pricing," and it can be anything from $0.19 to $64.93.
If a price is ending in a whole number or tenths, it is said to be "even pricing."
Odd-even pricing is a pricing strategy that is similar to charm pricing in terms of its psychological effect.It has to do with influencing the customer's perceptions of the product's value through the use of a numerical value.Odd-even pricing aims to increase sales and profits by adjusting prices in small increments.If a price ends in 1, 3, 5, 7, or 9, the "odd" part of this tactic refers to that price; if a price ends in 10, the "even" part refers to that price.
Odd-even pricing has a psychological effect on customers.A customer's psyche is influenced by the use of an odd or even number.
Because the price is still in the "teens" rather than the "twenties," a $20 item marked down to $19.99 is perceived as a better deal.Although the difference is only one cent, customers believe the price is lower than it is.It gives the impression that the product has the lowest possible price because of the unusual pricing.Customers also believe that the number is honest because it is so precise.
There is a different effect when it comes to prices that are equal.If a customer sees $1,500 as a rounded number, they will assume it is a high-end item.The product is perceived to be of greater value because it has a round number on the label.
Let’s look at some real odd-even pricing examples. One industry that commonly uses both sides of the odd-even spectrum is jewelry.
To begin, there is an oddity in the pricing.Take Kay Jewelers, for example.Everyone should be able to access high-quality jewelry and feel like a million dollars...However, some of the prices are too high for some people.
Kay Jewelers and other jewelry retailers like them come to the rescue here.Advertisements for "GIFTS UNDER $199" appear on the homepage."24.99 SELECT HEART JEWELRY," for instance.
In addition to reading "$103.95" and "59.49," some of these items are marked in red text with an extremely accurate price.There's no doubt that these items are meant to be perceived as a bargain.
In addition, there's Tiffany & Co., which is renowned for those who can afford to splurge on the finer aspects of life.
The evidence is in its price.For starters, if you want to see the price of a piece of jewelry, you have to hover your mouse over it.The fact that the prices aren't displayed in plain sight is further evidence that this is a high-end product.
Even numbers like "$2,200," on the other hand, are used when prices are announced.Customers at Tiffany & Co. don't care about discounts, so there are none.
The answer is no.It may be a sign that you're confident in the value of your product and that you're a premium brand if your price ends in ".00".As a result, many high-end companies avoid odd-even pricing and sales because it could harm their brand's reputation.
Consider, for example, Rolex's.The price of these high-end watches ranges from a few thousand dollars to tens of thousands.When it comes to price wars, Rolex doesn't want their name associated with bargains.
While many websites will scream "SALE!" like crazy, the Rolex dealer below prefers to keep things low-key.You can see how much money you'll save if you buy pre-owned, but the website doesn't go out of its way to publicize this fact.
The price ends with 00, don't you think?Retailers aren't going to give a damn about cents or dollars when it comes to Rolex watches.Rather, their prices are usually based on hundreds or even thousands of dollars.
It's important to Rolex and their dealers that their prices reflect the fact that they're not going to argue over a few dollars.
Avoid using cents and odd even pricing if your products are of a high quality, which could send the wrong message and attract a different customer base.Consider whether your product is positioned as a good value or as a high-end luxury or premium offering before making the decision to use odd-even pricing.