Monday, October 10, 2005

Pricing Paradigms

You know what really grinds my gears? The way that marketers and advertisers price things that we purchase using almost whole numbers like $19.95 or $9.99 or $29.98…are these fucking people kidding? Do they honestly believe that a person is going to be looking at the price for a movie, and say to themselves “Wow…only $15.99! That’s only $15 for a movie, but I expected to pay $16…what a great price!”. Is that the thought-process they were shooting for when they took off A PENNY and hoped that the American public would buy into their crap? I guess they seem to think that people will think they are getting a better deal, or that the item in question is less money than originally expected, purely on the basis of our in-ability to round decimals.

Well, guess what: we are not as dumb as you think we are, marketing executives!!

Since we were children, we were taught in math class to round up. It was drilled into our brains, along with the I before E rule and the Sex leads to STD’s and babies, ALWAYS rule. We have been taught how to do it…we are good at it. It’s a fairly simple concept to grasp, too.

For the marketing and advertising people out there that like to use the $19.95 pricing rule, here is a quick lesson in advanced mathematical and decimal theory, done by my friend Billy in the 4th grade:

If the number in the tenths decimal place is higher than, or equal to 5…you round the number to the left of the decimal up by one. This is called rounding up. If the number in the tenths decimal place is lower than 5…you do not change the number to the left of the decimal. This is called rounding down.

Check out these examples for rounding to the nearest whole number:

7.56 = 8
5.34 = 5
132.89 = 133
19.95 = 20

I hope this clears things up, for you idjits out there who like to use the $19.95 rule for consumer pricing. Let me help you out: we are NOT falling for your crap, nor do I think that we ever did, to begin with. I don’t know anybody lame enough to think that $32.99 equals $32….not one damn person. Hey, marketers! Do you think we are retarded? Do you think we cook our bacon in the freezer, or wear our socks on our heads? Do you see me counting on my fingers when trying to calculate how many times I’ve fucked your wife? No. Please stop treating us like morons. Some of us are partially educated, you know.

People instinctively round numbers...usually up. Look at time, as another example. Who looks at the clock that reads 2:59 pm and says, “Wow! It’s only 2:00! I have plenty of time to make it to my 3:00 meeting! I think I’ll go play in traffic for a while!”

Does anybody do that? No. Why not? Because it’s fucking stupid. Why would pricing be any different? No reason, whatsoever. So why does every price end with .95 or .99 or .98 or some other derivation? There are only 2 possible answers:

1-The people that price these things assume that we are the stupidest creatures to ever walk the face of the earth, since the Dodo bird.
2-The people that price these things are stupid because their parents were brother and sister.

That’s the only logical conclusion to make from the data given to us. Either they think we are stupid, or they are stupid. I’m not sure which one it is, although the latter sounds much better. Truthfully, the answer must be the first one…they assume we are idiots, that cannot think for ourselves.

Now, I’ve seen enough proof in this country on a daily basis to prove that most of the people we interact with on a daily basis are complete morons. However, even a moron can tell you that 3.99 rounds up to 4. Nobody walks into McDonald’s with 99 pennies, hoping to purchase a cheeseburger. They know that numbers round up, and there is this other magical thing called TAXES that make the numbers go up, even higher.

So marketing and advertising people in charge of consumer pricing: please stop this ridiculous pricing strategy, because it’s insulting and makes us angry. And you don’t want to see us angry…we might come to your house and beat you within .99 inches of your life.

Happy Monday!

Random thought of the day: This morning while watching CNN in the lobby of my office building, the headline at the bottom of the screen read “Military Quake Aid” and I wondered to myself, “What is a military quake?"


Heather said...

It does work though... that whole marketing. Maybe not on you as you have superior intellect... but here in Oklahoma I hear it all the time from the people shopping around me.

Its a dumb concept maybe... but that just says something about oklahomans doesnt it?

Bashful Blue said...

What I don't understand is gas prices. The sign says 2.69 and then there is that little 9 in the top right hand corner. Why don't they just price it 2.70 and be done with it? And it's always a 9. They should throw a 2 up there sometime just for the hell of it.

drunkbh said...

I saw this in a marketing class once. The extra 5 cents was taken off to make people feel like they were spending less. Unfortunatly, it worked which is why it is still around today.

Pizzle said...

This is going to be a long, intense fight for you, my friend.

It's stupid...however, you don't consider the lowest common denominator of human. It's not you, that's for sure.

Ms. Adventures said...

Shan I understand your issue. I myself have wondered the same thing but you know what's really wrong with you? You're not at the beach doing beachy fun stuff. You're in corporate sludge america and apparently angry about it. You've just not been the same since you came back from the beach and I'd like to give you a cyber hug with a nice rub on the back to say: everything's going to be OK. :kisses:


Rowan said...

I read once that this helps people on a psychological level not notice the sting of taxes as much. It's dumb, and yeah, I tend to always round up so I know I can afford said whatevers, but some folk really don't, I know, dumb you'll say, but yeah, it's common enough practice, like putting things in the impulse aisle knowing that product placement amounts to more purchases too. Yet again tho', I loved your writing style for your post, you are a natural writer and I wanna see you make it, sincerely.

Tydes Perdition said...

Dude, I'm so with you on this one.

"1-The people that price these things assume that we are the stupidest creatures to ever walk the face of the earth, since the Dodo bird.
2-The people that price these things are stupid because their parents were brother and sister."

In the end, it comes down to them being stupid for assuming that we're stupid. So #2 is the correct answer.

HighMaintenanceHussy said...

I love you 99.9%, Shan.

I screwed an economics major in college. (okay, some) and asked him this same question. He took went on about how this was a retail staple and the psychology behind it. Frankly, it still annoys me, too.

Shanshu said...

Ashley: Thanks for the hug! I'm not as angry as my post led on. It's all in fun.

Rowan: Thanks for the support. Bunny yeah!

tydes: I think #2 is the correct answer, also.

HMH: Are you sure you didn't get screwed BY an economics major? :)