Perhaps the most peculiar, mystical, odd piece of the marketing game is pricing.
On the surface, such stuff seems easy enough. Cheap? Good. Super-expensive? Hmmm. When the “Air Zoo,” a flight and aviation museum in Michigan, wanted to boost attendance last year, it lowered the admission price to zero. Attendance doubled over 2008. Who would have thought?
To be sure, the “marginal value” issue can come into play. I tend to drink more beer during “happy hour” than other times, because the beer is so cheap. But, by the time I’m on my eighth beer, the marginal value of that next beer has been considerably diminished.
Lower prices alone don’t explain marketing magic. Some research suggests, for instance, that we are inclined to choose and enjoy more expensive wine, even if it less tasty than a cheaper alternative — or, we prefer wine that we have been told is expensive, even if some sneaky academic researcher has poured it from a cardboard carton.
In recent years, what the marketing gurus have stumbled upon and used most effectively is the allure of weird pricing based on an arbitrary price number designed to make us insane with desire.
A Cornell University study this year in the journal Marketing Science found that consumers comparing two similar prices are easily confused by “rounded” prices (more zeroes — and perceive it to be higher, even when it’s lower). As author William Poundstone explained last year in his book, “Priceless,” there is no “correct” price for most products and services, which is one reason why odd prices that end in a nine tend to be rounded down by consumers, rather than up.
In a 2008 book, “Predictably Irrational,” MIT math professor Dan Ariely had great fun describing experiments that pointed out our mental illness when it comes to buying decisions and how prices influence us in strange and nonsensical ways.
All of which brings us, of course, to the University of Connecticut Board of Trustees, which voted last month to raise tuition exactly $432, raise on-campus housing 7.01 percent and hike on-campus board up 6.01 percent. Whit these bumps, the total annual hit is $20,968 per student.
What pricing madness lurks within this expensive package? Did housing costs really go up 7.01 percent, instead of, oh, say, 7.0 percent, so that the trustees could use the extra .01 in revenues to buy a champagne fountain for the boardroom?
Did the feeding and watering of students go up 6.01 percent, instead of an even 6 percent, so that the trustees could afford scallops wrapped in bacon for lunch after their board meetings?
Is the final cost for a year of UConn, $20,968, because we are all mentally ill and will think the total is only $20,000 and thus thank the trustees for their rigorous cost control and compassion?
What is to be made of the fact that UConn and the University of Rhode Island charge exactly the same amount of tuition and fees for out-of-state students? That’s right — $25,486. Not a penny more. Not a penny less. Apparently the higher ed marketing folks have determined that the sequence of numbers — in a 2-5-4-8-6 sort of way — encourages us to believe that the tuition is really only about $25,000, which is sort of like $20,000, in an $18,497 kind of way.
I’m going to end this column now. The Business Journal pays me at a rate that ends in a nine, instead of a zero. They’re playing games with me, aren’t they? I’m going to start writing 603-word columns. The editor will round it up to 700.
Laurence C. Cohen is a local freelance writer who now owes the Hartford Business Journal’s readers exactly 97 words.
