While prices in the Western world tend to end in 0, 5 or 9, many prices in Asia end in the number 8. A new study has explored the effects of the “lucky number” 8 in pricing practices.
Pricing is one of many marketing instruments. Corporations that operate internationally must consider whether and to which extent it is appropriate to adapt to local cultural circumstances. In China, for instance, the number 8 is regarded as a “lucky number”, which is why for example Apple sells a number of products with the price-ending 8 in the Far East. Together, Holger Roschk (Department of Service Management, Alpen-Adria-Universität Klagenfurt), Stanford A. Westjohn and Peter Magnusson (Culverhouse College of Commerce, University of Alabama) have investigated the effects of these price-endings.
For the purposes of the current study, which was recently published in the Journal of International Marketing, three investigations were carried out in Singapore: In a first step, the researchers analysed close to 900 price advertisements published in the country’s two largest newspapers. Subsequently, two experiments were conducted to determine whether superstitious pricing was relevant to Singaporean consumers with respect to price attractiveness, and whether a Western brand could create a perceived local image and benefit from using lucky-number pricing. Singapore was chosen due to its cultural diversity with elements of traditional Eastern and Western cultures, and dubs itself as a country where “east meets west”.
The results indicate that superstitious pricing is still practiced in Singapore, despite its modernity and the heavy influence of Western multinational corporations: Approximately 32 per cent of all advertisements contained prices ending in “8”, and 41 per cent prices ending in “9”, reflecting the unique cultural diversity of Singapore. The experiments show that the price level plays an important part in the perception of the price component linked to superstition. In the case of higher prices, superstition becomes a relevant driver for price attractiveness, as the latest findings have confirmed. Roschk provides the following explanation: “An individual who buys a more expensive product generally displays a greater degree of participation in the purchasing process. This is also more likely to involve superstition.” What is more, the team of researchers were able to prove that Eastern companies use the number 8 for their price-endings more frequently than is the case for their Western counterparts. Whether an international corporation should also place their bets on the lucky 8 very much depends on what is being sold, as the study revealed. “We were able to demonstrate that products with prices ending in 8 are more likely to be ascribed a local brands than to international brands. If the aim is to score points among rather traditional customers, and if the product to be sold corresponds to this orientation, it is advisable to pursue adapted pricing practices. For those products, which are endowed with an image that includes urbanity and which are directed at cosmopolitans, international price-endings generally prove more successful,” Holger Roschk concludes.