تاثیر و عوامل تعیین کننده قیمت گذاری به روش زیر قیمت در خرده فروشی مواد غذایی
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|1885||2012||16 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Retailing, Volume 88, Issue 1, March 2012, Pages 115–130
Research into nine-ending pricing indicates a clear effect on sales but strong variance, suggesting that their effects are context dependent. This research relates nine-ending effects to a broad set of determinants and investigates the influence of brand, category, store, and store area clientele characteristics. The numerous empirically supported hypotheses indicate that the framework built on level and image effects is well adapted for explaining the effectiveness of nine-endings. They validate that a wide and indiscriminate practice of nine-ending pricing is not effective. The findings show that the impact of nine-endings can lead to sales losses (e.g., premium brands); however, a nine-ending price is more effective for increasing sales of small brands (e.g., low market-share, low price, and new items) that belong to weaker categories (e.g., low price, low budget-share). The effect erodes as the store's nine-ending pricing practices intensify. For category sales, a simulation reveals the existence of a threshold for which overuse is counterproductive.
Nine-ending pricing is a common, and perhaps overused, marketing technique (Bray and Harris, 2006, Ngobo et al., 2010 and Schindler and Kirby, 1997), likely because of the traditional belief that price endings can have positive effects on sales. On the one hand, prior research reports an intense practice, with the percentage of prices ending in the digit 9 ranging between 52% (Anderson and Simester 2003a) and 80% (Schindler and Wiman 1989). Thus, determining whether the practice is effective for manufacturers and/or retailers is important. On the other hand, no research has investigated whether the extensive use of nine-ending pricing helps increase sales. Understanding this issue would help retailers make better pricing decisions and avoid a counterproductive pricing policy. Furthermore, many other unsolved questions remain about the effectiveness of the nine-ending pricing practice. For example, is the effectiveness of nine-ending practices similar across items? Across categories? In other words, what are the most responsive items to nine-ending practices? Are there items or categories that retailers should prioritize? If so, what are their characteristics? For example, do stronger effects emerge for brands with higher or lower market share? Are nine-ending prices less effective when more products use them? Are nine-endings as effective in increasing sales in higher-priced categories as in lower-priced categories? Finally, should retailers adapt their nine-ending practice policies to the stores and the profile of their potential shoppers? For example, what is the impact on sales when younger customers patronize stores, and is there a difference in stores with older clientele? Identifying the major determinants of the effects of nine-ending prices is fundamental to managerial decisions because it would help retailers set prices in a more effective and structured manner. This is the purpose of the research described herein.
نتیجه گیری انگلیسی
This research provides evidence of the context dependence of nine-ending effects and clearly demonstrates that manufacturers and retailers should not practice nine-ending pricing widely and indiscriminately but rather should contemplate the cases with significant impacts. With this perspective, this research helps them select precise conditions (i.e., items, categories, and store profile) in which to set prices with nine-endings to optimize their impact on sales. The analysis of the determinants reveals that nine-ending prices are less effective in certain conditions and might even generate a loss of sales. Though surprising, this finding can be explained by the quality–image effect: nine-endings might signal a lower quality, making a product less attractive and resulting in sales loss in some cases. This finding also supports Stiving and Winer's (1997) result in the tuna category. The current study offers additional information and provides the profile of brands that lose sales (−11% on average): the analysis of the negative estimates of nine-ending impacts shows that brands that lose sales correspond to premium brands that have been available for a long time, with high market-shares and high prices. This finding is consistent with Schindler and Kibarian (2001), who suggest that negative image effects occur only in cases of higher perceived quality (i.e., premium brands). It implies that manufacturers that produce premium brands should be suspicious of nine-ending pricing practices and should negotiate seriously with retailers and store managers on this point because nine-ending pricing often represents a store-level decision. Moreover, beyond poor sales performance, the use of nine-endings could associate the premium brand with low price and low quality, thus undermining the premium brand image. In contrast with prior research (see Table 2), the current research adopts a large scope and includes multiple variables of a diverse nature (product, category, and store). This study helps determine the factors that contribute the most to the nine-ending effect. That is, the findings reveal that the impact of nine-ending prices on sales is particularly strong for small brands (i.e., inexpensive brands, low-market-share brands, and new products) and low-involvement categories (i.e., low-priced and low-budget-share categories). In practical terms, retailers should also integrate demographic disparities across store areas in their local nine-ending pricing decisions. For example, nine-ending pricing practices should be less widespread in stores located in areas that consist of fewer working women and lower-income households. In contrast, nine-ending pricing practices should be more intense in stores that attract less educated customers. However, should retailers be concerned with overuse of nine-ending prices? The results reveal that the effectiveness of nine-ending prices decreases when a store intensifies its use of the practice. Rationally, a large number of nine-ending prices suggests intense competition among them, which weakens their effectiveness. The wider presence of nine-ending prices also may arouse the suspicion of consumers, who might become aware that these digits do not systematically mean good deals. Moreover, Gedenk and Sattler (1999) show that in almost every condition, retailers achieve higher profits when they set nine-ending prices. Thus, the findings of the current research question which tactic is most profitable: setting nine-ending prices for most SKUs, even though doing so weakens their effectiveness, or selecting a few SKUs for which responses are greatest to nine-ending prices. To address this question, a simulation calculates the impact of a store's nine-ending pricing practice and its variation on category sales. The simulation enables investigation of how the total category sales vary with the magnitude of the store usage of nine-ending pricing. Details of the simulation parameters and calculations appear in Appendix A. Table 10 reports the simulation results in the case of four categories that vary in their nine-ending pricing effectiveness: oatmeal (low effectiveness), refrigerated juices (medium), toilet paper (medium), and paper towels (high). In the category with the highest effectiveness of nine-ending pricing—namely, paper towels—setting nine-ending prices for most SKUs is most profitable in terms of category sales. In all the other categories, the simulation reveals the existence of a threshold for which overuse is counterproductive: incremental sales resulting from additional SKUs whose prices end in the digit 9 are not sufficient to balance the erosion in the effectiveness due to an intensified practice. For example, category sales are at their maximum when the nine-ending pricing practice pertains to 50% of the items in the oatmeal category and 60% in the refrigerated juices and toilet paper categories. Consequently, retailers should not systematically use nine-ending pricing but rather should select the SKUs for which the responses are greatest to nine-ending prices.Knowledge of retailers’ nine-ending pricing practices remains limited. Thus, it would be worthwhile to study in greater depth how retailers set nine-ending prices and determine whether this choice pertains to a specific type of pricing strategy (Bolton and Shankar, 2003 and Gauri et al., 2008). The Dominick's database provides some insight into this issue because each store appears in one of three price zones,1 defined mainly by competitive context. As Hoch et al. (1995, p. 27) note, “the lowest price zone is a warehouse-fighter zone, which is aimed at achieving closer parity with large [everyday low price] warehouse operations.” An additional second-stage regression (modified Eq. (2), with two dummies that reflect whether the store is located in a low or a high-price zone rather than demographic variables describing the store area) indicates that in almost all categories, the nine-ending pricing practice is more widespread in low-price-zone stores, and low-price stores practice much more nine-ending prices alone, with no simultaneous price reduction. However, this practice seems successful because the impacts of nine-ending prices are significantly greater in low-price stores. This finding is surprising because, in general, low-price stores attract price-conscious customers who should be more likely to scrutinize prices and check for real economic advantages (i.e., lower-level effect). However, consumers may perceive low-price stores as credible price experts, which may explain the persuasive power of nine-ending prices in these stores. Further research at the consumer level could test this explanation supporting the price–image effect theory.