Does impact of price endings differ for the non-green and green products? Role of product categories and price levels

Abstract

Purpose The discount image associated with odd-ending prices has led to its extensive use by retailers. The purpose of this study is to assess the impacts and applications of nine-ending vs round-ending prices on the purchase of green and non-green products at different price levels and under different purchase motivations. Design/methodology/approach Three experiments are conducted. The first experiment is a 2 (price ending: nine-ending vs round-ending) × 2 (product appeal: green vs non-green) between-subjects study; the second experiment is a 2 (price ending: nine-ending vs round-ending) × 2 (price level: low price vs high price) × 2 (product appeal: green vs non-green) between-subjects study; and the third experiment examined buyers’ preferences of price endings regarding the purchase of green products having either utility (utilitarian) or pleasure (hedonic) motivation. Findings This research highlights that consumers prefer zero-ending prices for green products and pleasure motivation products, but they prefer odd endings for low-priced and utilitarian products. These results support the increased reception of round-ending prices. Accordingly, this study contributes to the literature by providing a boundary condition for odd-ending prices. Specifically, the study finds that the effect of nine-ending prices becomes weaker as the price of the product increases. Practical implications The findings of this study have practical implications for managers, as the results indicate that pricing green products and high-quality perception products using round digits and pricing low-priced and utility perception products using odd digits will increase consumers’ purchase intentions. Moreover, pricing the products using round-ending prices will reduce the perception of low quality and deter brand loyalty emanating from a low-priced/discount image of a product. Originality/value This research contributes to theoretical and practical aspects of behavioural pricing literature. This research uncovers the buyers’ distinct preferences for zero-ending prices and odd-ending prices when purchasing different products based on different motivations and varied price levels. This is the first research of its kind to explore and compare the impact of psychological pricing on green products. The study also resolves a contradiction in past literature regarding the use of nine-ending prices by providing boundary conditions.