Round Price Endings

Wieseke, Kolberg, & Schons (2016)

W. Rofianto

Research Background

Traditional marketing theory posits that prices ending in 9 or 99,

“just-below” prices, increase sales (e.g., Bhattacharya et al. 2012).

However, a current trend among retailers is to use round prices.

(e.g., www.dollartree.com; www.poundworld.net), it can also be

observed with some supermarkets use round prices for special

promotions (e.g., www.tesco.com; www.7eleven.com)

“it is interesting that a strategy so

widely used and accepted by

merchants and academicians has so

little proof behind it” (Holloway 1973,

p. 77). Quite surprisingly, even after 40

years this observation still holds true

Purpose of The Study

1. Test effect of different price endings on actual sales

2. Test perceptions of different price endings

3. Test whether round prices are inherently more convenient

4. Combine effects in a path model and show general

relationships

Results: Study 1

Results: Study 4

Results: Study 4

Managerial Implications

1. Over recent decades, life in industrialized countries has

changed in ways that enhance convenience consciousness.

Finding new ways of increasing convenience is imperative—

especially for traditional brick-and-mortar retailers

2. Retailers should use round prices if the purchase situation

creates a high need for convenience (cafeterias, and other

locations where customers are in a hurry, like airports, gas

stations, and typical convenience stores

3. Precise prices are generally inferior to just-below and round

prices

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