The ‘first-impression effect’ is when the price’s leftmost digits tend to bias a customer’s perception of a price level, disproportionately. The price $19.99 would be indicative of this effect. What is the name of this style of pricing?

Question

BlackTom AI · Accepted Answer

To understand this pricing concept, we start by restating the question and the available choices to frame what we’re evaluating.
Question: The ‘first-impression effect’ is when the price’s leftmost digits tend to bias a customer’s perception of a price level, disproportionately. The price $19.99 would be indicative of this effect. What is the name of this style of pricing?
Answer options: ["Ending digits", "Just-below pricing", "Round-number pricing", "Perception pricing", "Price awareness"]

Option 1: Ending digits. This label would suggest focusing on the final digits of a price (like 99 or 49), but the phenomenon described in the question centers on the leftmost digits rather than the ending ones. Therefore, this option misplaces the emphasis to the wrong part of the price.

Option 2: Just-below pricing. This choice aligns with the described tactic: pricing something at $19.99 instead of $20.00 to create a perception of a lower price, leveraging the leftmost digit to bias perception downward. The structure intentionally uses a slightly lower first digit before a trailing amount to nudge buyers, which matches the described effect.

Option 3: Round-number pricing. Setting prices at clean numbers like $20, $25, or $100 is about simplicity and memorability, not about exploiting the leftmost digits to bias perception. This option describes a different strategy focused on ease of rounding rather than psychological bias from the initial digit.

Option 4: Perception pricing. While this term could broadly describe psychological pricing, it is not the standard label for the specific tactic of using a slightly lower leftmost digit like 19 instead of 20. It’s a more general descriptor rather than a precise naming of the phenomenon.

Option 5: Price awareness. This phrase would imply a general state of being conscious about prices or perhaps a consumer’s cognizance of pricing, not a named pricing strategy. It does not capture the specific manipulating of the leftmost digit to influence perception.

In summary, the choice that directly corresponds to employing a price like $19.99 to bias perception via the leftmost digits is the Just-below pricing strategy, while the other options either reference different concepts or describe broader, less precise ideas.

MGT355H5 F LEC0101 Term Test 2

The ‘first-impression effect’ is when the price’s leftmost digits tend to bias a customer’s perception of a price level, disproportionately. The price $19.99 would be indicative of this effect. What is the name of this style of pricing?

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