You may have observed when you something from mall or outlet, the prices on the things are written as 99, 199, 299 etc. Usually the prices have 99 at the end. Why the prices are set at 1 rupee less ?
The retailer gets two benefits by doing so. These benefits are :
1. Psychological Marketing Strategy -
The prices are set in this way so that more customers get attracted by the thing and pay the amount to buy. You may note that we read the paying amount from left to right. So, for example, you are buying a dress, and the rate is written as 799. When you will read, first your mind will set at digit 8, so you will think that its price is 800 and not the 900. You will try to buy it if it is in your budget. To increase their sales, they set one rupee less.
2. Black Money -
Retailers collect black money by doing so. When you go for shopping in a big malls, you get attracted with the maintenance of the place. While paying the amount like 99, 199, 299 etc, you did not take back the remaining one rupee. You will feel shame that its a well reputed place, and by asking them to return, your status will get low. So, the large no. of customers visit for shopping, and in this way they stores the black money.