President Donald Trump says he has directed the Treasury Department to stop minting new pennies, citing the rising cost of producing the one-cent coin.
Nitpick: It was more about association. When you see a price of $x.88, that’s almost always from Walmart. They want their price to be distinguishable from everybody else’s, and easier to pick out when you’re looking at a list of comparable prices when all of them are just doing $x.99 instead.
And the 11 cent savings does add up over time at a consumer level. It means nothing as far as Walmart is concerned. But if you go grocery shopping and buy, say, 100 different items (which you can easily do during one shopping trip that covers multiple weeks or if you have a large family), that’s $11 in savings. So when you’re price comparing, it basically leads to “Well, they’re all about the same price everywhere. but if I buy it all at Walmart, I save about ten bucks. So I’ll go there.”
It’s all about associating “$x.88” with Walmart, and making sure that if everything else is equal, Walmart still has that one last edge that tips the scales ever so slightly in their favor when it comes to consumer decisions. And it is amazingly effective.
I think that might just be a by-product of it. I remember back in a college marketing class when they first started implementing it at Walmart and they were one of a few examples of retail companies using the pricing structure already.
Stretching my memory the others were a regional dollar type store, a regional electronic place that would have sales for like $88.88, and a number of car places where they would use 1s, 0s and 8s to make the price look cheaper. Like $10,888.00.
I think you’re right. Walmart does x.88 pricing because the x.99 pricing started losing psychological effectiveness.
Nitpick: It was more about association. When you see a price of $x.88, that’s almost always from Walmart. They want their price to be distinguishable from everybody else’s, and easier to pick out when you’re looking at a list of comparable prices when all of them are just doing $x.99 instead.
And the 11 cent savings does add up over time at a consumer level. It means nothing as far as Walmart is concerned. But if you go grocery shopping and buy, say, 100 different items (which you can easily do during one shopping trip that covers multiple weeks or if you have a large family), that’s $11 in savings. So when you’re price comparing, it basically leads to “Well, they’re all about the same price everywhere. but if I buy it all at Walmart, I save about ten bucks. So I’ll go there.”
It’s all about associating “$x.88” with Walmart, and making sure that if everything else is equal, Walmart still has that one last edge that tips the scales ever so slightly in their favor when it comes to consumer decisions. And it is amazingly effective.
I think that might just be a by-product of it. I remember back in a college marketing class when they first started implementing it at Walmart and they were one of a few examples of retail companies using the pricing structure already.
Stretching my memory the others were a regional dollar type store, a regional electronic place that would have sales for like $88.88, and a number of car places where they would use 1s, 0s and 8s to make the price look cheaper. Like $10,888.00.