Effect of 99-ending prices and Hispanic ethnicity on a service: an empirical analysis

Date
2016
Authors
Gasparini, Luis
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Abstract

While prices are frequently set based on cost, demand, and competition, this research adds to a growing body of thought that behavioral considerations should also be considered. Most past studies have evaluated a number of effects regarding price endings. Yet, there is a considerable dearth of research regarding price endings in the contexts of services and consumer demographics. This study examined the effect of a 99-ending priced service in a retail medical clinic by utilizing a large-scale field test. Two specific effects were analyzed. The first was how demand is affected by 99- versus 00-ending prices. The second was what consumer demographics may influence those results. This research adds to the discussion that 99-ending prices may work under specific conditions. It further substantiates the association mechanism and the saliency of price endings in terms of the purchase-versus-not-purchase decision. The 99-price ending produced an effect when a heterogeneous demographic sample was analyzed as a homogenous group. Yet, when that same sample was examined further, the effect of the 99-ending price was actually produced by the interaction of the 99 price ending and the ethnicity variable (Hispanics).

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Department
Marketing