ONLY $99.99!!! -- Just how stupid are we?

[Cyrano]

Two-fer-one dinners -- Only $39.95!

Flat screen TV -- Only $2399.99!

Why don't stores understand that we understand that $39.95 is $40 bucks and $2399.99 is $2400 bucks? How stupid do they think we are???

The answer is: Stupid beyond belief. Would you really run out and buy a TV because it costs $2399.99 rather than $2400? Many do.

I don't begrudge businesses trying to survive. But, given the current financial disaster we are all in, why don't any of them try honesty?

Why can't they say, "We know times are hard. But treat yourselves to an evening out for $40 and we'll treat you like royalty."

The early 20th century journalist, H.L. Mencken said: "No one ever went broke underestimating the intelligence of the American people." So again I ask, "Just how stupid are we?"

[nadinbrzezinski]

1. Marketing 101 and human psychology

you understand why... and as a seller of PDF Role Playing Games, I hate to tell you that I do that.

It improves sales

[TomInTib]

10. And, it's as easy as that. Ain't it, nadine?

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4721785&mesg_id=4721827

Happy New Year, nadine.

T.

[nadinbrzezinski]

16. Yes it is Tom, and I have actually run the experiment

I had a couple products at full price (aka full figure,) Once I moved them down five cents, to .95 sales improved

And happy new year to you too and yours

[Cronus Protagonist]

2. We're stupid enough that it works!

So, there's your answer.

[Sarah Ibarruri]

3. It never fools me. I walk away more readily from .99s than from whole numbers....

I think the reason is that I lived in Europe and in Europe there's not really a mythological belief that the .99 somehow fools the buyer into buying.

[Veritas_et_Aequitas]

4. I thought the 99-cent thing was a relic from the age of penny newspapers

or is that just a delightful urban legend?

[Sarah Ibarruri]

5. Never heard that one! nt

[Cyrano]

6. I have always wondered just how brain dead someone has to be to

to fall for the .99 garbage.

At one time, people recognized that someone with a mask and a gun was robbing them. Today, a .99 seems to accomplish the same goal.

[TomInTib]

7. "Just how stupid are we?" Plenty, that's how much.

I am retired from Marketing.

The space between $39.95/99 and $40.00 can be neither defined or measured.

By any multiple, it holds true.

But I wouldn't use "stupid".

Maybe "unsophisticated", "ignorant", "pre-occupied", "screaming kid", "gotta pee", "did he mean what he said when he left, this morning?", "God, the house payment. And now, this."

You name it.

But you cannot measure it.

Anyway, that's my $00.02.

Tom

[gravity]

8. We aren't rational creatures

it is psychological based, not intelligence.

[alfredo]

18. The five cents off is a small gesture in the direction of the customer. It is

a concession. It's gut level.

I'm an old salesman. Worked retail fourteen years. It's little things that makes a sale. From the placement of merchandise according to price, and the way you control their path through the store. You are working with emotional beings.

[Deja Q]

9. And gasoline is $1.559 = $1.60

[Cyrano]

11. Hey, when it comes to gas, what's a penny between "friends?"

[floridablue]

17. Or perhaps 1.60

[MiniMe]

28. That would be $1.56

[Muttocracy]

12. Americans are horribly math illiterate for one; on the other hand if there's tax

the cost is actually over the .99 price

I'd also lump in this ignorance category how much people will complain about the price of gas because it's posted on billboards and forget about the cost of other things. Or they'll be willing to complain about the price of gas while wasting far more money on lottery tickets, a new gadget, what have you.

[OffWithTheirHeads]

30. Gas is too expensive but $2.00, I mean $1.99 for a bottle of water

is just fine.

Yep, we are pretty stupid.

[Muttocracy]

32. yes, one of my pet peeves!

should have mentioned that one.

[Jane Austin]

13. Because marketing research shows that people will by the same blouse

priced at $39.99 more often than when it's priced at $34.99.

You'll have to decide if that means people are stupid.

[Ichingcarpenter]

14. $0.9/10 on your gasoline

That is the major psychological reinforcement on our psyche.


As long as that one stands we will have problems
addressing that round up thing.

[Duer 157099]

15. One word: Blink

Great book by Malcolm Gladwell, I just read it. The whole book talks about exactly why marketers do such things -- because our brains process info in a split second, long before we consciously think about what we're thinking about.

It's really a good book.

[TomInTib]

19. Right on the money, dotcosm...

We are the biggest suckers in the Primate World.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4721785&mesg_id=4721827

And I am drinking great wine and eating frozen food.

I am one of them, don't you see?

And MerryChristmasHappyNewYear, dotcosm.

Tom

[pipi_k]

20. The ones that always make me shake my head

are the $5.00 each or 2 for $9.99 (or similar)

OK, I suppose there are advantages to saving a penny, but not when someone has just burned up $8.00 worth of gas running around town looking for "sales".

[The Straight Story]

21. I would think they do that to avoid the tax on the next dollar

from what I have heard (if they made it an even $5 for example you would pay tax on that purchase at $5 but at 4.99 I think you pay less.

[nadinbrzezinski]

22. No , it is marketing, You pay the same percentage of taxes on your sale

regardless of the amount.

But the human brain is strange and the truth is that this works.

In countries where pennies don't exist, it may go to the closest five cents to the full amount

Lets say 5.95 pesos...

And it has nothing to do with how well humans are educated in math. It is human psychology

If you understand it, you get it and avoid it... but even then, will give you an example, today's door busters at Mays... (I needed a gift for mom's bday next month) were priced at 9.99... why? They KNEW that they'd more units if they priced it at 9.99 than 10 bucks, it is basic marketing... (and I knew that was exactly what I was looking for. But I'd pay 10 bucks either way. They were on my list of what I was looking for today)

Now they had a leather jacket for 49.99... and I actually stopped for all of ten seconds... then went... nah... good price, (fifty really), but I have plenty of jackets. So on the blink principle of the brain they ALMOST got me. Why on big sales go with list in hand.

[rurallib]

23. When talking about government expenditures

why does a number like $700 million sound far larger than $1.5 billion? That 700 just sound BIG.
BTW wasn't the penny under pricing an invention of FW Woolworth?

[spag68]

24. .99

I have a very easy fix for the problem. All that has to be done is stop minting the penny, and next month eliminate nickles. At least then it becomes easier to see what is up. It has to cost more to mint a penny then a penny.

[anigbrowl]

25. Actually it's got more to do with reducing employee theft

If you hand the cashier 2 $20 bills, it's easy for them to void the sale and pocket the money. You're less likely to have 39.95 or whatever, so the small difference usually requires them to open the register and make change. The effect on customer psychology is a by-product but not the main purpose.

[Ichingcarpenter]

26. No wonder you still work for the clergy

or Republicans

[anigbrowl]

27. Is this supposed to mean anything?

Seems you don't like factual information. Too bad.

[radfringe]

29. "Just how stupid are we?"

you don't have to look any further than the results of the 2000 and 2004 presidential elections for the answer to that question

[Muttocracy]

33. there's a winning answer! nt

[Cyrano]

35. The outcomes of those elections had more to do with theft than stupidity.

[radfringe]

37. and we were stupid enough to let them get away with it.... n/t

[bread_and_roses]

31. stupid enough to think that we can keep consuming our way to happiness

...infinitly consuming in a very finite world. That we can have cheap gas and McMansions and SUVs and STILL have sustainability. That we can buy things made with child slave labor and not pay for it. Until we address some of those stupidities....

[WillieW]

34. It actually costs more than the .99 -adding 6% sales tax.

[Sheepshank]

36. So then the question is...

do you perpetrate the stupidity by ignoring this lesson? ...or when you go shopping do you remember to round up your numbers and teach this simple trick to the kids? I clearly remember the kids originally thinking $29.95 was more similar to $20 than $30. To kids, $10 makes a HUGE difference. A lesson well learned. My 10yo knows the marketing/psych tricks and hopefully will think things through everytime she goes out to spend her pocket money.

[lies and propaganda]

38. I have an ecommerce site.. I am a glass artist..

There was a whole thread yesterday dedicated to people swearing up and down there business went up when they changed their prices to have 99 cents in them.. I find it absolutely batshit. cant see personally and kind of psychological marketing.. It means nothing to me. 39.99 is 40.00.

My prices will stay the same ;0

[L0oniX]

39. But wait ...order now a get a second one "free" ...yea right!