Impact Of Prices Ending With .99 In Online Travel Portals For Budget Hotels In New Zealand

Research Significance

Title: Impact of prices ending with .99 in online travel portals for the budget hotels in New Zealand

The background of research sheds light on the fact that prices set by the budget hotels in New Zealand on the online travel portals ending with .99 has created a positive impact on the buying behaviors of consumers. The budget hotels have been using this marketing strategy by providing discounts for the services provided and manipulating the price tags often by ending it with .99, which is a common thing that the consumers often notice nowadays (Nickolayev & Dennisov, 2010). It can be an effective sales tactic that influences consumer behaviors and because the clients read the price from left to right the first digit resonates among them the most and this allows the budget hotels to create a price sensitive experience by encouraging clients to try out the $4.99 item rather than $5 item.

The significance of the research is that it will focus on the budget hotels and are price sensitive, due to which, prices are often discounted and kept like this to create a positive psychological mindset among the people.  This allows for reducing the amount of effort put forward to make product decisions and at the same time, setting price as .99 can help in making the service available with discount or on sale, which acts as a pricing cue to motivate the clients regarding purchase (Mattila & Gao, 2016).

The rationale of research focuses on the problem statement that shows that only budget hotels are to be considered, which can be a problem and thus considered as the research rationale. The research rationale is actually the problem of the research that also will focus on quality over price and thus the price tag ending with .99 can also represent the item or service as cheap, which can create negative mindsets among the clients (Wagner & Jamsawang, 2012). The customers who pay in cash may face issues and they may pay $100 even when price of product is $99.99, which can be another problem as well.

The research aims to evaluate the impact of prices ending with .99 in online travel portals for the budget hotels in New Zealand and how it contributes to the influencing of consumers regarding their purchasing behaviors and buying decisions.

• To identify the prices ending with .99 set by the budget hotels in New Zealand to influence consumer psychology and encourage buying decisions to be made effectively
• To evaluate various approaches for improving the effectiveness of psychological pricing technique and influence consumer behaviors
• To assess the probable impacts of setting prices at .99 for influencing the choices of clients and encouraging them to avail the services provided by the budget hotels in NZ
• To recommend various measures for improving the psychological pricing strategy without compromising on the quality of services provided by the budget hotels

Impact of Prices ending with .99

According to Kleinsasser & Wagner (2011), the prices set at .99 often as facilitated the psychological pricing strategy implemented by the budget hotels to draw in more customers and make them believe in discounted prices that can be availed (Kleinsasser & Wagner, 2011). The price tag of .99 can encourage the purchasing intention of clients, furthermore ensured that it represents a kind of discount or some kind of offer placed on the price of services. The consumers are accustomed to see the prices at .99 though the prices often deviate or change from the format that can create an impact on the way the costs are interpreted by the budget hotels (Levy et al., 2011). The prices ending with .99 acts as discounted prices that has helped the clients not to associate the items with cheap deals rather allowed the hotels to project an image of discounted price for the service or underpriced product or service (Mitra & Fay, 2010). As the customers mostly read the price starting from left to right, the first digit present in the price actually remains embedded in the minds of customers at first and thus the prices ending with .99 seemed like that the services have been provided at good deals. This has been an effective psychological pricing strategy and considered as an effective marketing technique too for influencing consumers’ mindsets and encourage their buying decisions, furthermore allow them to make purchases consistently and increase the revenue generation of the hotels all over too (Knotek, 2011).

Problem Statement

According to Ngobo, Legohérel & Guéguen (2010), the process ending at .99 acts as influencing factors for the hotel brands as the online portals managed by them have been frequently accessed by the clients and this has enabled use of a controlled experiment. This has also facilitated the difference in sales associated with the prices ending at .99 and even ensured drawing the clients by encouraging their positive behaviors and mindsets regarding the .99 ending prices set for the services delivered (Ngobo, Legohérel & Guéguen, 2014). It has created a huge positive impact on the sales and profit and has even allowed the companies to spread awareness of the brand through effective psychological pricing strategy keeping in mind the quality that should not be compromised as well. On the other hand, Macé (2012) argued that the services when displayed at prices ending with .99 at the online travel portals by the budget hotels have allowed the consumers to judge the products to be on sale and made them believe that they might not get a better deal or offer, which influences their buying behaviors. The customers often believed that the prices ending with .99 could signify lower quality service while the zero ending could be for high quality services (Macé, 2012). Thus the hotel brands tend to use zero ending too, though the ending with .99 often attract customers’ attention and make them believe that the services are available at discounted prices, which influence their purchasing habits and thus increased the sales revenue for the budget hotel brands too (Choi et al., 2014).

The gaps in research are the missing aspects in the literature and include the areas that have been left unexplored. It could be the sample size or population along with research methods and data collection procedures while the research variables linkage can also be considered as gaps in literature.

The literature review section contained the secondary data and information derived from various sources, which could be later analyzed and interpreted for linking the research variables and ensure accomplishment of research goals and objectives with ease and effectiveness (Swarbrooke & Horner, 2012).  

The research methodology is the most important chapter of the proposal that includes the philosophy f research, design, ways of collecting and analyzing data and ensuring proper testing of hypothesis to conduct the research appropriately (PETKOVSKI & MIRCHEVSKA, 2013).

H0: The prices ending with .99 in online travel portals set by the budget hotels in New Zealand cannot influence consumer buying behaviors

H1: The budget hotels set prices ending with .99 for influencing the buying behaviors of consumers and generate higher business revenue

The research is conducted considering the budget and price sensitive hotels that set prices ending with .99 to influence choices and purchasing behaviors of consumers. The three different types of research philosophies are positivism, post positivism and interpretivism research philosophies. The information will be derived from the sensory experiences considering the fact that relevant knowledge and information are obtained with the inclusion of primary data (Nagle & Müller, 2017). The hidden truths behind the research subject will be understood, which can assist in obtaining knowledge about the incremental facts and enhance the scopes for observations, furthermore interpret the results effectively. The validation of existing theories and concepts will also tend to make the research successful and thus the positivism philosophy will be considered here as effective (Neuman, 2013).

Research Aim

The exploratory, explanatory and descriptive designs are used for conducting the research. The exploratory research design presents theoretical data and information to define the initial research and bring out new ideas that can be helpful for conducting future research through extraction of information from existing research materials while the explanatory research design analyses the cause and effect derived from the research. This lacked accuracy and reliability, due to which the descriptive research design will be suitable, which could allow determining the what and how of research and the results should be certain and relevant too (Lambert & Lambert, 2012). It could also fill the missing gaps and link the dependent and independent variables, i.e., influence of consumer buying behavior, depending upon the prices ending with .99 for the budget hotels’ online portal, which is the independent variable here.

The random probability sampling method should help in selecting respondents randomly and obtain their responses while the non-probability convenient sampling technique could enable arranging suitable time for managers of the budget hotels to provide their responses regarding the setting of prices ending with .99 (Taylor, Bogdan & DeVault, 2015).

The process of collection involves both primary and secondary data collection. The primary data constitutes of qualitative and quantitative data while the secondary data have already been derived from secondary sources to represent the literature section. The qualitative data will be obtained by conducting interviews with the manager based on their convenient time when they can be available to provide their views and opinions regarding the research subject. The quantitative data will be acquired by distributing survey questionnaires to them and obtaining responses provided by them without any bias (Englander, 2012). The secondary sources from which data could be collected could be websites, journals, articles, documents, etc.

The analysis of data will be done by using SPSS tool and later it will be interpreted to bring favorable results. The analysis of data should be represented in tables, graphs and charts to make the researcher understand with ease and derive positive outcomes (Creswell & Creswell, 2017).

The research methods and literature review section shows that it has contributed to the creation of more scopes for conducting the research in a much more detailed manner. The proposal could signify the outcomes derived to be used for managing a proper dissertation based on the same research subject in the future as well (Flick, 2015). From the research, it can be understood that none of the respondents were forced to take part in the survey process and the data and information were authentic and genuine considering its impact on the research’s validity and reliability. The research will be used to academic purposes only and not to obtain any kids of commercial benefits, which could also benefit further researches in the future considering the missing areas to be explored as well (Panneerselvam, 2014). The research materials were destroyed and made sure that it does not fall in wrong hands while some of the information were stored properly considering prevention of unauthorized access for ensuring that data replication or copyrights are violated while conducting research on the similar topic in the future (Simmons, Nelson & Simonsohn, 2011). This also maintained the ethical standards of the research.

Research Objectives

The major limitations and constraints that might be faced could be the time and cost constraints. There were language barriers due to which, responses were not provided by few of the individuals involved in the survey process while there was skipping of questions due to lack of knowledge and understanding of the questions (Brinkmann, 2014). The research has been completed within the time that was assigned, still with the allocation of some more time and additional financial resources, the missing areas would be explored and more time could be spent to research the topic in a detailed manner.

Conclusion

The research highlighted the importance of setting prices ending with .99 to create positive mindsets among customers to influence consumer buying behaviors. This could be stated as a effective psychological pricing and effective marketing technique to draw in more customers towards the price sensitive hotels and thus research was done for the same. The objectives and hypothesis were aimed to be achieved and thus proper literature review had been provided along with the consideration of various research methods along with collection and analysis of data to accomplish the research goals effectively.

References

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