Odd Pricing in Selected Retail Outlets

Abstract

Price setting in real-life situations is a complicated task involving various factors.  A number of pricing strategies can be adopted depending on company objectives.  On the retail level, psychological pricing is prevalent of which odd pricing is one approach.  Prices are considered odd if they end in a few centavos or pesos below an even (rounded) number.  The data used in the study were obtained from advertisements published in the Manila Bulletin from April to June 1988.  A total of 43 retail companies were included in the sample.  They advertised 3,349 prices of which 1,312 were classified as odd prices.  The statistical technique used was the chi-square statistic.  Results indicate that department/specialty stores had the highest proportion of odd prices at 74% followed by travel agencies (64%), furniture stores (60%), book stores (36%), and supermarkets (33%).  The four most popular odd price endings were P0.95 (supermarkets and department/specialty stores), P9.50 (book stores), P95 (furniture stores) and P8 (travel agencies).