What pricing strategy involves setting prices that end in odd numbers, typically 7 or 9?

The pricing strategy that involves setting prices that end in odd numbers, such as 7 or 9, is known as odd pricing. This technique is used primarily in retail to make prices appear more attractive to consumers. It capitalizes on consumer perceptions; for example, a price of $19.99 is often interpreted as being significantly lower than $20, leading customers to perceive they are getting a better deal.

Odd pricing can evoke a psychological response where shoppers are inclined to buy products because of the way the price is displayed. Research has shown that consumers tend to focus more on the leftmost digits of a price; hence, a price ending in 99 or 97 is strategically crafted to draw attention, influencing a buying decision.

This method aligns with the broader goal of maximizing sales volume and enhancing customer perceptions of value. Other pricing strategies, such as premium pricing, bundle pricing, and value-based pricing, focus on different aspects of pricing strategy and consumer behavior, such as positioning products as high-end or offering discounts for combined purchases, rather than specifically manipulating perceived value using odd-numbered pricing.