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Round Pricing and Product Perception

στρογγυλή τιμολόγηση round pricing

Round Pricing

Having analyzed the ,99 pricing in our previous articles (1 & 2), it is time to check the effects of the round pricing in consumer behavior! There are numerous research findings and directions which make this particular phenomenon pretty interesting.

How do consumers perceive round pricing?

Consumers are not just passive receivers of prices, but they tend to create cognitive schemes for the overall product and the way it got priced. For example, Schindler (1991) mentions that round pricing may give the impression that the products were priced hastily and that the pricing was conducted in a hurry by the seller. Such a course of thought may give birth to the idea that the price can be negotiated and decreased (Schindler, 1991).

Round pricing as an indicator of quality

In one of our previous relevant articles, it was mentioned that prices that end in ,99 might imply that the product is of low quality. On the other hand, according to Wingate, Schaller & Mlller (1972), products with round pricing are possible to be perceived as high quality ones (as cited in Schindler, 1991). In terms of branding, round pricing can lead to the construction of an elegant brand image (Spohn & Allen, 1991), and that usually takes place when the cent digits of a price are omitted, insinuating that the business does not pay attention to low value currency (as cited in Schindler, 1991)

Round pricing in different cultural contexts

Although it may seem weird, consumers do not judge prices only by personal beliefs, but also by their cultural context. The study of Nguyen, Heeler & Taran (2007) revealed that prices ending in 9 impact western and eastern cultures differently. The eastern culture is better known for the element of respect towards consumers, leading to more expectations from the aforementioned (Nguyen, Heeler & Taran, 2007). So, pricing that ends in 9 is perceived as a marketing hack from the consumers, decreasing the credibility of the seller, while round prices are more suiting to markets with such a philosophy (Nguyen, Heeler & Taran, 2007)

Conclusions about round pricing

Despite the illogical reactions consumers may have when they face certain price digits, it is considered that when they become aware of these impacts, the latter might subside (Choi, Li, Rangan, Chatterjee & Singh, 2014).

Now that you have all the information about pricing, which do you think is the appropriate pricing strategy? Would you use it for all products? Share your opinion freely!

Christos Panousis

Researcher και writer for Nudge Unit Greece

~Explaining Behavioral Economics Simply~



Choi, J., Li, Y. J., Rangan, P., Chatterjee, P., & Singh, S. N. (2014). The odd-ending price justification effect: the influence of price-endings on hedonic and utilitarian consumption. Journal of the Academy of Marketing Science, 42(5), 545-557.

Nguyen, A., Heeler, R. M., & Taran, Z. (2007). High-low context cultures and price-ending practices Pricing strategy & practice. Journal of Product & Brand Management, 16(3), 206–214.

Schindler, R. M. (1991). Symbolic meanings of a price ending. ACR North American Advances.

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