It makes consumers less likely to choose pricey upgrades
Setting a price just below a round number ($39.99 instead of $40) may lead consumers into thinking a product is less expensive than it really is – but it can sometimes backfire on sellers, a new study shows.
Researchers found that this “just-below” pricing makes consumers less likely to upgrade to a more expensive version of the product or service, such as a bigger size or higher-end trim on a car. The just-below price that makes a product itself seem like a good bargain also makes the leap to the premium product seem too expensive, said Junha Kim, lead author of the study and doctoral student in marketing at The Ohio State University’s Fisher College of Business.
“Going from $19.99 to $25 may seem like it will cost more than going from $20 to $26, even though it is actually less,” Kim said. “Crossing that round number threshold makes a big difference for consumers.” Kim conducted the study with Joseph Goodman and Selin Malkoc, both associate professors of marketing at Ohio State. Their research was published yesterday (Aug. 26, 2021) in the Journal of Consumer Research.
For many people, summer vacation can’t come soon enough – especially for the half of Americans who canceled their summer plans last year due to the pandemic. But when a vacation approaches, do you ever get the feeling that it’s almost over before it starts? If so, you’re not alone.
Time not only flies when you’re having fun – sometimes anticipating a fun event makes it feel like it will be over as soon as it begins, a new study suggests. Researchers found that people judge future positive events as being both farther away as well as shorter in duration than negative or neutral events. Combining those two elements has a strange effect when people look forward to a positive event like a vacation, said Selin Malkoc, co-author of the study and associate professor of marketing at The Ohio State University’s Fisher College of Business.
“The seemingly endless wait for the vacation to start combined with the feeling that the vacation will fly by leads people to feel like the beginning and the end of their time off as similarly far from the present,” Malkoc said. “In other words, in their mind’s eye, the vacation is over as soon as it begins. It has no duration.”
We talk with JCR editor Andrew Stephen about our recent research, a meta-analysis on the experiential advantage, and the journey to publication, including what we learned about publishing meta-analyses.
Selin Malkoc on The Lisa Show. “When we say the word “hobby”, we often think of leisure time devoted to casually doing something we love in our spare time. …but when it comes to time spent relaxing (and nothing else), how can we truly maximize our relaxation and not feel the need to be in a busy mindset? Joining us is Dr. Selin Malkoc, a behavioral scientist and marketing professor at The Ohio State University. She’s here to talk with us about how to really maximize our leisure time.”
…Ohio State University’s Chair of the Marketing and Logistics Department Joe Goodman says this is the way to win at retail. “The retailers that are providing an experience for their consumers are the ones that are driving in traffic and getting consumers in the door. Once they can get you in the door, chances are, you’re probably going to buy something,” said Goodman. Goodman says the key is offering experiences that you can’t buy online….