PSYCHOLOGICAL PRICING NEW DRUG STORE EDITION HOW STUDIES WERE MADE The studies were made by tabulating all the retail prices appearing in more than 20,000 advertisements of chain and independent stores in daily newspapers in 50 cities. Many of the advertisements featured 10 or more items, so that the total number of prices tabulated exceeded 100,000. The charts show the relative frequency with which the different prices were featured in the advertisements analyzed, and graphically spotlight those used most extensively. The charts, therefore, reflect the experience and composite judgment of retailers as to which prices are psychologically most effective in moving merchandise. Or, to state it another way, the psychological prices shown are an indication of consumer mass behaviorism as manifested at the point of sale under actual selling conditions. COPYRIGHT CHARLES W. HOYT COMPANY, INC. Planned Advertising-Established 1909 Main Office: 380 Madison Avenue, New York 17, N. Y. Miami Office: Chamber of Commerce Bld Psychological Pricing-10¢ to $4.00 New Edition-Department, Furniture and Miscellaneous Stores 19 25 29 35 39 49 50 59 69 75 77 79 88 89 95 Method of Charting Prices This chart shows the relative frequency with which the different prices were featured in the newspaper advertising of department stores, furniture stores and miscellaneous stores. Because of the high frequency with which $2.99 was noted, this price was made equal to 100, and the frequency of all other prices has been related to that 100. For example, the number of times that 99 was noted is charted as 68, because this number is 68% of the frequency of the $2.99 price. It should be noted that the most popular price was $1.00, represented by three bars and a frequency figure of 222. The chart includes only those prices showing a frequency ratio of 10 or more. 97 96 99 1.00 1.19 1.25 1.29 1.39 1.49 1.50 1.59 1.65 0 Pricing Trends Prices ending in odd numerals, with 9 and 5 particularly favored, are popular at numerous price levels. The most striking exceptions are prices ending in 88 and in multiples of 50%. The former represents a new trend since our 1953 study. At around the $1.00 level, this price is fo!lowed, in order, by 99, 98¢ and 97¢. At the $2.00 level, the sequence is $1.99, $2.00, $1.98, $1.95. At the $3.00 level, it is $2.99, $2.98, $3.00, $2.95. These trends are much the same as shown by our 1953 study. While our previous study showed $1.49 to be slightly favored over $1.50 and $2.49 over $2.50, current practice appears to favor the even figure in both cases. 1098 10.99 11.00 11.95 12.00 12.88 12.95 12.99 13.95 14.88 14.95 15.00 Pricing Trends The prices most strongly favored are those Copyright 1957, Charles W. Hoyt Company, Inc., New York, N. Y. 1 48-222-65- -32 12 125 13 A 14 15 16 17 18 19 .20 .21 22 .23 Method of Charting Prices The chart shows the relative frequency with which the different prices were featured in the newspaper advertising of retail food stores. The number of times that the most frequently used price (394) was noted has been made equal to 100, and the frequency of all other prices has been related to that 100. For example, the number of times that 35% was noted is charted as 45, because this number is 45% of the frequency of the 394 price. Chart includes only prices showing a frequency ratio of 3 or more. Method of Charting Multiple Item Pricing This chart shows, for the first time, food store pricing practices as applied to the offering of more than one item. The number of times that the most frequently used price (2-29) was noted has been made equal to 100, and the frequency of all other prices has been related to that 100. For example, the number of times that 2-35 was noted is charted as 63, because this number is 63% of the frequency of the 2-294 price. Chart includes only prices showing a frequency ratio of 5 or more. NOTE-In order to show a wide range of prices, this chart has been drawn on an enlarged scale compared to the chart on the opposite page. Thus the two charts are not visually comparable. The number of single item prices far exceeds the number of multiple item prices in food store advertising. Pricing Trends At all price levels up to 69, the number of items most frequently offered in combination is 2. The range is particularly great at $1.00, though 3, 4 and 5 are the most popular combinations. As in the case of single item pricing, prices ending in an odd numeral are predominantly favored. Copyright 1957, Charles W. Hoyt Company, Inc.. New York, N. Y. |