Insight of the Week
December 1, 2023

Set Prices That Are Divisible By Purchase Quantities

Customers prefer prices that are divisible by the purchase quantity because it helps them imagine using these products.

4 pack of vitamins for $16

Overview

Consider a 3-pack of candles for $15.

Each candle would cost $5. Pretty good, right?

But why not lower the price to $14.50? Wouldn't this unit price — less than $5 — be more appealing than $5?

Ironically, no. Researchers found a peculiar effect with bundles: Customers prefer bundles in which prices (e.g., $15) are divisible by the quantity (3-pack; Park, Kwon, & Bagchi, 2023).

In their studies, customers preferred:

  • 4-pack of body wash for $16 (vs. $15.30)
  • 6-pack of tissues for $18 (vs. $17)
  • 8-pack of toothbrushes for $16 (vs. $15.41)
  • 11-pack of cashews for $11 (vs. $10)

Why It Works

Divisibility creates a per unit price.

If customers see a 3-pack of candles for $15, they calculate $5 per candle.

This calculation shifts their attention from the bundle to the units. Customers imagine the candles as discrete items:

Customer seeing a 3-pack of candles for $15, then imagining $5 per candle

In turn, these discrete images help them imagine usage scenarios (e.g., one for the living room, one for the bathroom, one for the bedroom).

With no clear unit price from a $14.50 bundle, customers focus on the bundle itself. It's harder to imagine usage scenarios, and it feels less urgent to replenish these candles when you're imagining an abundance of them.

Takeaways:

  • Adjust Prices or Quantities. Whichever can help you reach divisibility.
  • Multiples of Prices Can Work Too. Similar effects happen with two multiples (e.g., 4 small pizzas with 6 toppings for $24; King, & Janiszewski, 2011).
  • Charm Prices Might Work Best. Instead of $15.00, try $14.99. Customers might round up to $15 for divisibility, yet $14 would anchor a lower price for the bundle.

Other New Studies

  • Use Duration Prices That Are Easy to Multiply - Sometimes I see specific prices for durations, such as $63.46/hour or $13.45/month. But are they effective? This week's study might shed light. See my LinkedIn post which expands on this idea.