Nominal prices are known to have a distinct impact on pricing, which is normally seen in the form of 9‐ending prices. This article aims to study the effect of nominal prices on…
Abstract
Purpose
Nominal prices are known to have a distinct impact on pricing, which is normally seen in the form of 9‐ending prices. This article aims to study the effect of nominal prices on pricing patterns using data from a real‐life experiment: the currency changeover to the euro.
Design/methodology/approach
The study examines quantitatively the impact of the euro changeover on the price endings used in grocery retailing.
Findings
The results show that the length of the price has a marked impact on price endings. The adjustment of price endings is also found to be a very slow process.
Research limitations/implications
The study examines pricing two different market situations within one industry (grocery retailing) in one country (Finland) and shows that there is a difference between pricing patterns in different market situations. It is clear that more research is needed to obtain a more detailed picture of pricing patterns by studying diverse market situations.
Originality/value
This article gives a better understanding of the effect of price length on price endings based on real‐life data sets from before and after the euro changeover. The results are robust because the studied markets and, thus, the culture remained the same over the study period. Further, this article for the first time examines the adjustment of price endings in a market change caused by a currency changeover.
Ville Aalto‐Setälä and Anu Raijas
This paper examines consumer price knowledge by comparing the actual market prices and consumer price estimates in the Finnish grocery market. Although the individual price…
Abstract
This paper examines consumer price knowledge by comparing the actual market prices and consumer price estimates in the Finnish grocery market. Although the individual price estimates of consumers were found to differ significantly from the actual market prices, the medians of consumer price estimates and market prices were very close to each other for most of the products in our data. The study indicates that consumer price knowledge is not as poor as previously suggested by the results of point‐of‐purchase studies. We suggest that at least part of the weakness in consumer price knowledge can be explained by differences in market price variation.