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Consumer spending: Why nine is the magic number
Wed, Jul 23, 2008
AFP

PARIS - RETAILERS' belief that customers like a price ending in a nine rather than a rounded-up zero - 199.99 instead of 200.00, for instance - has been borne out by scientific research on a restaurant menu.

Researchers carried out a field study at a small, 22-seat restaurant in Brittany, western France, where customers were given a limited choice of dishes (five pizzas, four of meat, three of fish and four salads).

The team singled out the restaurant's second most-popular pizza to see what happened over six weeks, when customers were faced with the option of a rounded-up price or a price ending in a nine.

For the first two weeks, all the items on the menu had zero-ending prices.

For the following fortnight, the price of the 'target pizza' was brought down by one centime of a euro (1.58 of a US cent), to 7.99 euros (S$17.12), while the prices of the other dishes still ended in a zero.

For the last two weeks, all the dishes had nine-ending prices.

The popularity of the target pizza rose by around 15 percent during the test's second phase, the study showed.

When the item was pitched at 7.99 euros, it became easily the restaurant's most popular pizza against rivals with zero-ending prices. It was ordered by 49.50 per cent of customers who ordered a pizza.

But in the first and final phases - when all the dishes had the same price - the target pizza was preferred by 34.1 and 35.9 per cent in pizza orders, respectively.

The paper, by Nicolas Gueguen and Celine Jacob of the University of Southern Brittany in Lorient, appears in the International Journal of Hospitality Management. -- AFP

 

 
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