Odd vs. Even Pricing and Pricing Strategies in the Sports Industry

Odd Pricing

Which Product Will Sell The Best (Odd Or Even Priced)? Which Product Is Perceived To Be Of  Higher Quality (Odd Or Even Priced)?

Do You Agree With The Sports Marketer’s Pricing Decisions?

Price is the premium placed on a product or service and is the outcome of a complex set of ability-taking measurements, analysis and understanding and risk-taking. A pricing strategy includes segments, ability to pay, market conditions, competitor actions, trade margins and cost of inputs. It's targeted against the defined customers and the competitors (Kienzler & Kowalkowski, 2017). The marketer of sports faced a challenge in determining the right price for the customers. It can be multiplied in different manner. Therefore, most of the sports company offers different type of pricing strategy to attract maximum number of consumers (Weisstein, Kukar-Kinney & Monroe, 2016).

In the following part there will be detailed analysis of the pricing strategy that is being adopted by sports companies the through which they can able to attract its consumers to the certain extent.

Odd pricing is a method of pricing which aims to maximize profit by making microadjustments in pricing structure. This relies on the assumption that buyers are averse to measurement aand will therefore read only the first digits of a price when making their purchase decision (Deshpande, 2018).

Even pricing refers to a product that ends in a whole amount or in 10ths, like $0.20, $2.50 or $65.00.In the belief that certain prices or price ranges appeal to a certain set of buyers, even pricing is a psychological pricing strategy involving the last digit of a product or service price (Hanna & Dodge, 2017).

In order to compare the demand of odd or even pricing method, it has been found that both methods are using in the sports product at greater level. However, the demand for odd pricing will be high due to the reason it is assumed that odd pricing has a considerable impact on the mind of a consumer. The belief that goods are much cheaper compels a buying response. It is also assumed that consumers are subjected to a constant price flow; they only store the most important first digits of a number. This is because in humans the processing time for memory is slower. It is also assumed that odd pricing conveys the illusion that items are priced at the lowest possible price, because it is known that even prices are the result of the seller rounding up the price to an entire number. Strangely prices also offer a seller an illusion of integrity for the same reason. Therefore, due to such reason the odd pricing method will be more effective to sell sports product in the market, as their process are generally high so it will give relaxation to the consumers that they have purchased their sports shoes at low cost.

Even Pricing

The sports goods imported from Great Britain were of superior quality in olden days in the US. When their price was translated to dollars their result was a peculiar price. Therefore, people identified odd priced items as those of a higher quality, which prompted marketers to brand even domestic products at an uncommon price to catch the eye of the buyer.

Price skimming is the practice of paying a relatively high price when a new, revolutionary product is released and then lowering the price over time to reach various points on the demand curve. It is one of the effective strategies that are used for sports car as well as for sports shoes by the companies. The price of sports shoes generally charge high by Nike when they launch in the market till new design of sports shoes doesn’t come in the market. After launching new product, the price of previous product goes down through such manner they adopted price skimming strategy in selling its sports shoes. Furthermore, the sports car generally launched at premium or high amount till new technology is not launched in the market. After launching new model of sports car in the market, the price of previous model goes down that represent that the company has adopted effective pricing skimming method (in which the price of its product was high at the time of launching and get low when new model comes)to earn maximum number of consumers in the market (Du & Chen, 2017).

Pricing penetration is a marketing strategy that businesses use to attract customers to a new product or service by providing a lower price during their initial offering. The lower price helps the company enter a new product or service and draws customers away from the rivals. Market penetration pricing relies on the strategy of using low prices initially to make a wide number of customers aware of a new product (Baker, Collier & Jayaraman, 2017).

Most of the leading companies have adopted penetration pricing method to entre in the new market as well as to attract the attention of the consumers. In the sports industry, for sports watches as well as swimming goggles, the companies are using penetration pricing method. It helps the companies to enhance its revenue after reaching out to the maximum number of consumers to the certain extent. The goal of a price penetration strategy is to persuade customers to try a new product and gain market share in the hope of keeping new customers up to normal prices (Fetchko, M. J., Roy, D. P., & Clow, 2018).

Analysis of The Method

Rest of the marketing mix follows competitive pricing strategy to attract maximum number of consumers to the certain extent with the increase in the level of competition; the sports companies are forced to adopt competitive pricing strategy to compete its competitors as well as to cover wider range of consumers in an effective as well as in an efficient manner.

Competitive pricing is a pricing strategy in which the prices of the rivals are taken into account when determining the prices of the same or similar goods. The emphasis is on values guided by demand, rather than costs of production and overheads. Prices are based on how other VARs are selling their on the market products and services. Many large sports corporate firms also adopted competitive pricing tactics as they enter new markets. A thorough market analysis is needed to establish the correct price of the product in the competitive pricing process (da Silva & Las Casas, 2017).

  In order to analyse the marketing pricing decision of the sports companies, it has been found that the company has taken efficient marketing pricing decision due to the reason, each product has different value as well as demand. Therefore, the sports companies are using pricing strategies accordingly through which they can able to grab the opportunities from the market in an effective manner.

Conclusion

From the above analysis, it can be concluded that marketing strategy play wider role in the growth as well as development of the company. Pricing strategy is one of the parts of marketing mix that is used by all companies to achieve great success and revenue from the market. Even and od pricing method is used to attract maximum number if consumers towards the product. It is the method in which the price of the product represents in odd number of in ten’s that makes the consumers feel that the price of the product is not high. Sports industry are the growing one in which the spots companies uses different pricing strategies for different product. Price skimming pricing strategy is used for sports car and sports shoes whereas penetration pricing are used for sports watches as well as swimming goggles. Therefore, for other sports product, competitive pricing are used that hep them to compete its competitors in an effective manner.

References

Baker, T., Collier, D., & Jayaraman, V. (2017). A new pricing strategy evaluation model. International Journal of Operational Research, 29(3), 295-316.

da Silva, E. C., & Las Casas, A. L. (2017). Sports marketing plan: an alternative framework for sports club. International Journal of Marketing Studies, 9(4), 15-28.

 Deshpande, S. S. (2018). Various Pricing Strategies: A Review. IOSR Journal of Business and Management, 20(2), 75-79.

Du, P., & Chen, Q. (2017). Skimming or penetration: optimal pricing of new fashion products in the presence of strategic consumers. Annals of Operations Research, 257(1-2), 275-295.

Fetchko, M. J., Roy, D. P., & Clow, K. E. (2018). Sports marketing.London: Routledge.

Hanna, N., & Dodge, H. R. (2017). Pricing: policies and procedures. London: Macmillan International Higher Education.

Kienzler, M., & Kowalkowski, C. (2017). Pricing strategy: A review of 22 years of marketing research. Journal of Business Research, 78, 101-110.

Weisstein, F. L., Kukar-Kinney, M., & Monroe, K. B. (2016). Determinants of consumers' response to pay-what-you-want pricing strategy on the Internet. Journal of Business Research, 69(10), 4313-4320.