How does the valuation affect perception? According to international researchers who checked out 9,200 prices in 23 countries. The team checked out the last numbers of prices and whether it might be classified as round prices (USD 10), Just-Below (USD 9.99) or precise (USD 9.87). Then they compared the perception of those prices in several countries, categorizing countries by way of their individualism (as independent people from others feel), long -term orientation (specializing in the longer term on short -term success) and avoiding uncertainty (feeling of danger by unknown situations). The team found individualistic cultures comparable to Australia, Canada and the Netherlands, were more positively related to round prices and negatively related to prices simply, potentially because round prices could make the products seem prime quality and trustworthy. In cultures aimed toward reducing uncertainty comparable to Greece and Portugal, only beer prices seemed preferred, probably because they’re related to “good offers”.
Journal/Conference: Borders in behavioral economy
Tests: Paper
Organization/s: Leuphan Lüneburg University, Germany
Founder: The creator (authors) declares that no financial support for research was received, by and/or publication of this text.
Media release
WITH: Boundaries
Round up, just below or a precise amount? Choosing the ultimate product price can only be a culture
Have you ever noticed how the last variety of prices in the shop often follow an analogous pattern? Scientists have examined this phenomenon and located that a few of them may depend upon the culture by which you reside. Looking at the degrees of individualism of society, long -term orientation and avoidance of uncertainty, they found a relationship between these cultural dimensions and just, precise and round prices. This suggests that price strategies exceed national borders and are under the influence of cultural differences.
It is well-known that culture affects consumers’ behavior, however the impact of culture on prices is less studied. One of the ways by which culture can reflect prices are price endings, which could be round (EG 10.00 USD), just below (e.g. $ 9.99) or precise (e.g. € 9.87). Although all these prices are common, little is understood about why sellers in some markets prefer one from others.
Now scientists in Germany have examined whether cultural dimensions-individualism, avoiding uncertainty and long-term orientation-they come across how often consumers see some sorts of price endings.
“Considering that culture significantly affects the behavior, learning and emotions – why not dissemination of prices?” Said Dr. Meikel Soliman, a researcher on the University of Leuphan in Lüneburg and co -author of the study. “Our findings reveal a relationship between price endings and cultural dimensions.”
Is the worth correct?
There are six cultural dimensions that describe how the culture of society affects the values of its members and the way these values affect behavior. In the present work, scientists focused on three of them: individualism that describes the degree to which individuals feel independent of others; Avoiding uncertainty, defined because the degree to which members feel threatened by unknown situations; and a protracted -term orientation that describes cultures that typically give attention to the longer term in a way that delays short -term success in favor of long -term success.
Scientists covered 9,200 prices from 23 different countries of their study. “Contrary to our expectations, higher individualism was positively related to the spread of round prices and negatively related to prices simply,” said Soliman. “This may be due to the fact that in individualistic cultures retailers can perceive prices consisting in signaling of lower quality and avoid them to maintain the image of high -quality brand and attractiveness for consumers seeking individuality.” In the study of culture, individualistic were represented by countries comparable to Australia, Canada and the Netherlands.
On the opposite hand, cultures aimed toward reducing uncertainty can simply prefer prices. “Prices simply canvas are related to lower costs and” good offers “, explained Soliman. “This can explain why retailers in cultures with high uncertainty are favored by signaling lower prices. Similarly, round prices may not signal good quality, reducing their ability to cut back uncertainty. “These cultures were represented by countries such as Greece, Portugal and Belgium.
The authors also stated that the long -term orientation was associated with the greater dissemination of round prices. “Round prices can convey quality and trust, helping retailers to construct long-term relationships,” said the Solian. Cultures that favor long -term relations were represented by countries, including Estonia, Germany and Spain.
Meeting price expectations
In a globalized world, in which suppliers often compete for clients from various countries and cultures, these observations can be used to ensure a cultural perspective when setting prices. They also emphasize possible cultural differences that affect price strategies and can help in adapting prices with expectations in the shape of customer culture. Although scientists did not examine directly whether knowledge of price formats increased the likelihood of choosing some products, they said that this could cause a friend of a product to others.
The team also indicated that their study was limited, it was some respect. They examined only one e-commerce platform and focused on selected countries that may limit generalization. In addition, scientists did not observe a causal relationship between cultural dimensions and price endings and did not examine the basic mechanisms.
Nevertheless, these observations in the price of culture are important for retailers and everyone operating on a globalized market. “Suppliers face quite a lot of price expectations,” Soluman summed up. “Our research helps explain these expectations, providing insight in the best way detailed to adapt prices in various cultures.”
