Business pricing strategy | Odd Pricing

What is Odd pricing?

A psychological pricing strategy, which involves the last digit of a product or service price, in the belief that certain prices or price ranges appeal to a certain set of buyers is called Odd pricing. For example, if a seller sells a product for $19 instead of $20, then the product makes the price appear to be in the “teen ranges” rather than the “twenty ranges.” Then, the customer perceives the price to be lower than it actually is.

Usually, a buyer sees odd numbered prices as bargains, so to play that perception into the pricing strategy of the sellers sells their products with odd pricing strategy.

Odd pricing refers to a price ending in 1,3,5,7,9 just under a round number, such as $0.19, $2.47, or $64.93. Even pricing refers to a price ending in a whole number or in tenths, such as $0.20, $2.50, or $65.00.

How this strategy works?

This strategy not only works at the consumer level, even more than it. This strategy plays with the consumer’s mind and works at the subconscious level.

A form of psychological retail pricing suggests customers are more sensitive to certain ending digits. More than tons of research has been done to try and discern the perfect price point for a product. What is the price that is most enticing to customers?

Odd pricing refers to a price ending in 1,3,5,7,9 just under a round number (e.g., $0.79, $2.97, $34.95). Even pricing refers to a price ending in a whole number or in tenths (e.g., $0.50, $6.10, $55.00). The idea is that a price ending in .99 sounds cheaper in the mind of the customer than those ending in .00.

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