*Ostroff, Fair and Company>>>Other - Advertising & Marketing

Why are most items we buy priced with either .99 or .95 cents?

Why aren't they just rounded to the next dollar? Is it so that they can advertise that something is "less than 300 dollars" when it is $299.99?

Study after study has shown that sales go UP when you price at .99. This works for the digit after the decimal best. For instance, $1.99 looks less expensive than $2.00, but $1.49 is not preceived much differently than $1.50. Source(s): Thomas, M. Journal of Consumer Research, June 2005; vol 32: pp 54-63. News release, University of Chicago Press Journals.

Apparently it's a psychological thing. It tricks your brain to think more around the $200 region instead of $300 (which it really is - as in your example).
It's insulting our intelligence. It's supposed to sound cheaper
That is exactly why.
For every dollar, tax is added on (In NJ it's 6 cents per dollar) SO to make it look a little cheaper (but only by that small amount) they price things like that.
Psychology, If you see an item for $17.99 you will say it is $17 not $18. works even better for the high priced items where you do not round in your head but rather say it is under $300

Tags

Government & Non-Profit Food Service Financial Services Administrative and Office Support Other - Advertising & Marketing Search Engine Optimization

Related information

I heard something about Nokia Advertising Solution...?

Grocery Store Loyalty Cards - Report Spending???

Can you legally use the expressions "the Best" or "the Only" in an advertisment ?

What major corporation do you think has the best marketing strategy?

I need to order some personalized pencils and pens with my company name on them. where can i go online ?

In what way does a company go about identifying different customer groups and needs?

Preferred customer card?

What a good website for on line surveys you get paid for that actually work?