Why does product prices end with 99 or .99

why product prices end with 99


You go to malls, shops and even online we notice one thing which is common in all advertisements is that almost every product pricing ends in 99 or .99. Have you ever wondered why the companies choose such an odd price for their product? Why product prices end with 99 or .99? Today we will answer this question.

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Just by reducing the price by only 1 cent or dollar they are actually able to sell more units than before. It is one of the most popular and effective marketing strategies that every marketing agency and company follows.

The reason is very tricky and has psychological impact on our buying tactic. This is known is charm pricing or psychological pricing. Humans tend to read from left to right, the first digit of the price echos the most in our mind.

Even if the product is just a penny less to the next round figure we find it better than the round off. A $4999 product sounds better deal than $5000 because the first one starts with 4 and the other with 5. That’s why buyers are more likely to buy a product for $1.99 than an identical one for $2.

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The item that starts with $1 seems like a better deal than the one that starts with $2. Also consumers tend to perceive odd prices as being significantly lower than they actually are. Like $17.99 seems good deal than $18.99 or 18.

This is the reason why retail prices are often put as one less than the nearest round figure. That is all about “Why product prices end with 99 or .99”.

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Jai Singh

Love reading and writing about technology, trying new stuffs and spreading the same in most easy way possible.

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