Exploring the effect of psychological pricing on consumers’ impulse buying

Melanie Delgado

College: College of Business and Public Management

Major: BS.GLOBALBUSINESS

Faculty Research Mentor: Salehi, Reza Fazli

Abstract:

Psychological pricing strategies are widely used by a variety of organizations to influence consumer behavior and their perceptions of prices which often allow products to appear more appealing and reasonable to buy. Research studies indicate the impact of the differential strategies like charm pricing (e.g. $6.99) where it targets users’ perception of pricing which would enable them to impulsively purchase the product. This study explores the effect of psychological pricing on consumers’ impulsive buying behavior in environments like stores. A mixed-method approach was used including quantitative questionnaires, which were distributed among a diverse group of 100 people that included multiple demographic groups along with a study that concluded that consumers had believed that prices that ended with ($.99) are cheaper than rounded ones which consumers think they save more, but it ends up leading to more buying. The increased use of these strategies shows the types of ways where markets play an efficient role in using psychology to persuade consumers into getting their product. These findings flaunt a direct relationship between consumers impulsive buying and the psychological pricing that is being used. The most effective strategies include charm pricing and direct discounts. However, the study had also concluded the role of emotional behavior like FOMO (fear of missing out) plays and the psychology of scarcity, which widened their needs and overall, reduced their rational thinking. This research highlights the significance of how markets use effective strategies to target consumer’s buying power which adds to the success of organizations.Keywords: Consumer Behavior, Impulse Buying, Psychological Pricing, Charm Pricing