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ABSTRACT
Eastern versus Western culture pricing practices differ with respect to price endings; however, Eastern cultures are
increasingly influenced by Western multinational corporations. At the same time, increasing antiglobalization sentiment
suggests the use of localization strategies in these markets. The authors investigate whether pricing practices still differ in
this new environment, examine the role of superstition, and ask whether Western brands can benefit from localizing
pricing practices. They explore the use of lucky number price endings and consumer responses to such pricing strategies in
Singapore, an Eastern culture that is strongly exposed to Western multinational influence. Using a content analysis of
newspaper advertisements and two experiments, the authors find that superstitious pricing practices continue, especially
with high-priced items and brands of Eastern (vs. Western) origin. In the experimental studies, they find that superstitious
pricing has a positive effect on price attractiveness and that foreign brands that localize their prices benefit from a more
positive brand attitude.
I
nternational marketers face pressure to localize the preferences (Cavusgil and Zou 1994) and can vary greatly.
marketing mix, of which price is a particularly important Such environmental differences and perceptions of these
component (Theodosiou and Katsikeas 2001). Local- differences positively influence pricing adaptation (Sousa
izing may influence perceptions of localness that can ben- and Bradley 2008). The challenge for international mar-
efit brands in terms of prestige in the local market and keting managers is in identifying and interpreting differ-
even quality for some product categories (Özsomer 2012), ences in cultural beliefs that are relevant to consumers and
though it is global brands that are typically associated with have implications for localization (Kostova and Zaheer
quality and prestige (e.g., Steenkamp 2014). Thus, attempts 1999).
to localize the marketing mix can be beneficial to brands.
Pressures to localize can be categorized in terms of firm and With respect to localization of the marketing mix, an in-
management, product, industry, and foreign-market char- teresting and understudied topic is the role of superstitious
acteristics (Tan and Sousa 2013). Pressures resulting from beliefs. Superstitious beliefs are present in nearly all societies
market characteristics encompass cultural and customer (Vyse 2014). For example, according to results from a re-
cent Harris Poll (Corso 2014), 33% of Americans believe
Stanford A. Westjohn (corresponding author) is Assistant Professor of that finding a penny is a sign of good luck, and 24% report
Marketing and International Business, Culverhouse College of Com- that it is bad luck for a groom to see the bride before the
merce, University of Alabama (e-mail: sawestjohn@cba.ua.edu). Holger wedding. Superstitious beliefs also extend to numbers, with
Roschk is Professor of Marketing, Alpen-Adria-Universität Klagenfurt
(e-mail: holger.roschk@aau.at). Peter Magnusson is Associate Professor
of International Marketing, Culverhouse College of Commerce, University Journal of International Marketing
of Alabama (e-mail: pmagnusson@cba.ua.edu). The authors received ©2017, American Marketing Association
financial support from Catholic University of Eichstätt-Ingolstadt during Ahead of Print
conduct of the second study. Bulent Menguc served as associate editor for DOI: 10.1509/jim.16.0022
this article. ISSN 1069-031X (print) 1547-7215 (electronic)
Superstitious beliefs have been shown to influence consumer Our second contribution is the identification of two mod-
judgment and decision making (Kramer and Block 2008, erators: price level and brand origin. Price level is important
Tsang 2004). In Eastern cultures, preferences for products because price adjustments made to conform to local su-
are based on, for example, lucky color or lucky number of perstitions would represent a proportionally larger share of
units per pack (Block and Kramer 2009). With respect to overall price for low-price items compared with high-price
lucky numbers, initial research has shown that marketers in items. For example, a $2 price adjustment would have less
China prefer using lucky price endings (i.e., prices ending in financial impact on a $298 product than an $8 product.
8) and avoid unlucky price endings (i.e., prices ending in 4) Contrary to prior research (Simmons and Schindler 2003),
(Simmons and Schindler 2003). Western multinational our results indicate more use of lucky ending digits among
corporations (MNCs) also sometimes follow this practice high-priced (vs. low-priced) items. As such, the results
(e.g., Apple’s website for China lists its iPhone and iPad in provide a new perspective suggesting that (un)lucky pricing
prices ending in 8). However, it is unclear to what extent is not practiced the same way across different cultural
Western MNCs localize their pricing on the basis of su- settings. Furthermore, we introduce brand origin of the
perstition, whether they benefit from such localizing, and to price setter (Western vs. Eastern) as a moderator, which
what extent superstition continues to play a role in Eastern identifies lower rates of superstitious pricing practices
cultures that are increasingly exposed to Western multi- among Western firms that have never been revealed
national influence. Accordingly, we aim to answer the before. This finding highlights (1) the reluctance of
following research questions: Are (un)lucky number price foreign marketing managers to localize on the basis of
endings practiced in Eastern cultures that are increasingly superstition, (2) their intentional positioning of their
influenced by Western MNCs? Do practices vary depending products as Western, or even perhaps (3) the difficulty of
on the item’s price and the brand’s Eastern versus Western identifying relevant cultural differences that have impli-
origin? In what contexts do (un)lucky price endings influ- cations for localization.
ence consumer responses to such price offers? Can for-
eign brands benefit from localizing their pricing strategy? Third, prior research has focused exclusively on marketing
By attempting to answer these questions, we offer three practices, rendering consumer responses to (un)lucky pricing
contributions. practices a field yet to be explored. Therefore, as an im-
portant extension to previous investigations, we combine
First, whereas there is extensive evidence on the impact of the content analysis of advertisements with two consumer
the price ending digit for Western cultures and countries experiments to better understand whether and how the use
(e.g., El Sehity, Hoelzl, and Kirchler 2005; Schindler and of superstitious pricing is warranted. Analyzing consumer
Kirby 1997), little empirical evidence is documented for responses to (un)lucky price endings represents a step for-
Eastern regions, rendering (un)lucky price endings an under- ward by providing the behavioral foundation from the
researched topic in Eastern culture. More importantly, we consumer’s perspective for marketer’s practices. Study 2
analyze pricing practices in Singapore, an Eastern culture examines when (un)lucky price endings influence price
that has experienced strong influences from Western attractiveness, indicating an effect only when superstition
MNCs. This context enables us to test the boundaries of and involvement are high. Study 3 examines consumer
pricing practices. We chose Singapore because it has a rich responses to lucky pricing practices by a foreign brand and
cultural diversity with elements of traditional Eastern and provides justification and boundary conditions based on
Western cultures and dubs itself as a place where “east the effects on local image, brand attitude, and price attrac-
meets west” (Singapore Cooperation Programme 2011). tiveness. As such, the findings offer guidance to international
Superstition can be defined as the irrational belief that an In other words, regardless of whether one is superstitious,
object, action, or circumstance that is not logically related there is a tendency to act in accordance with superstitions to
to a course of events influences its outcome (Damisch, avoid risk by taking some (albeit irrational) action and to
Stoberock, and Mussweiler 2010). Superstitious beliefs are gain a feeling of control. Accordingly, conditions of risk and
invoked either to bring good luck or to fend off bad luck uncertainty play an important role in the effect of super-
(Block and Kramer 2009) and can be considered cultural stition on consumer behavior, as superstition serves as a
(e.g., Friday the 13th, the Ghost Month) or personal source of information in the face of uncertainty (Tsang
(e.g., wearing lucky accessories), with the focus of our 2004). Of special relevance to international marketers are
investigation being on the former. Marketplace impacts of differences in superstitions between Eastern and Western
superstitious beliefs have been reported for both Eastern cultures as they relate to the marketing mix. In this research,
and Western cultures. For instance, it is estimated that lost we focus on cultural superstitions about numbers and how
business in the United States on Friday the 13th amounts to they affect price setting.
$800–$900 million because of people’s fear of flying and
decreased daily business transactions (Palazzolo 2005). Superstitious Numbers in Eastern and
In Taiwan, the seventh month of the Chinese lunar cal- Western Cultures
endar is the Ghost Month, which is considered so unlucky
that pregnant Taiwanese women schedule preemptive Cae- As part of cultural heritage, superstitious beliefs in both
sarean sections to avoid giving birth during this month (Lin, Eastern and Western cultures include a wide variety of
Xirasagar, and Tung 2006). objects and acts (Jahoda 1969). Western cultural super-
stitions include the four-leaf clover and rabbit’s foot as
The most influential theory explaining superstition is symbols of luck, while examples from Eastern culture in-
Malinowski’s (1948) theory of the gap, which suggests that clude the color red and feng shui (Ministry of Commerce
superstitions serve to reduce anxiety in the face of un- 2004). Numbers have special meaning in both Eastern and
certainty. Thus, superstitious acts perform a cathartic Western cultures as well. The digits 8 and 4 have special
function by offering some sense of relief and control to the meaning in Eastern cultures because they are near homo-
people who engage in them. Other research has supported phones to the Chinese words for “lucky” and “death,”
this notion, finding that superstitious behavior is more respectively (Ministry of Commerce 2004). Likewise, the
likely under conditions of uncertainty (e.g., Keinan 2002; numbers 7 and 13 have special meaning in Western cultures;
Padgett and Jorgenson 1982). Even people who believe however, the origins of their meanings are less certain. The
that events cannot be instrumentally controlled by their number 13 could be a Biblical reference to the inauspicious
actions—so called “half-believers”—often behave in a way 13th guest at the Last Supper, Judas Iscariot, who betrayed
that is consistent with superstitious beliefs (Campbell Jesus. Similarly, according to Norse lore, a mischievous god,
1996). This may be explained by the automatic tendency to Loki, brought evil to the world as the 13th guest at a dinner
attend to potential negative outcomes and not tempt fate party in Valhalla (Maranzani 2013). The significance of the
(Risen and Gilovich 2008). number 7 also has ties to religion (e.g., Judeo-Christian
teachings that God created the world in six days, then rested
Superstitious behavior can also occur independent of the on the seventh day). Thus, the nature of the origins of su-
belief in the efficacy of such behavior, as a means of gaining perstitious numbers in Eastern and Western cultures seem
a feeling of control. Control is a basic psychological mo- quite different.
tivator, and perceptions of control are associated with
positive psychological and physical outcomes (Case et al. As a result of these superstitious beliefs, these (un)lucky
2004). Thus, even the feeling of control has value. Control numbers are (avoided) preferred in society. For example, in
processes that instrumentally affect outcomes are consid- Western cultures, hotels often number the 13th floor as the
ered primary control, while secondary process control is an 14th floor instead. In Eastern cultures, research has found
Indeed, superstitious behavior is itself an attempt to control In contrast, the use of superstitious numbers as the RMD
the uncontrollable and tends to reduce anxiety (Malinowski assumes that consumers will actively process this in-
1948; Vyse 2014). This should be particularly important formation and use it in an informative role to evaluate
for high-priced items, which are viewed as inherently the product. Consequently, although Western managers
riskier. Accordingly, Tsang (2004) finds that Chinese recognize a need to locally adapt product offerings, the
managers employ superstitious beliefs only when making adaptation of RMDs may not be considered a meaningful
highly important decisions. Thus, when purchasing high- adaptation because Western pricing models assume
priced items, the price cue plays an informative role that limited processing of the RMD anyway. Furthermore, it
reduces uncertainty and anxiety related to the purchase. may be a deliberate attempt by the brand manager to
Consequently, there should be a greater propensity to increase perceptions of globalness (Parsa and Hu 2004),
purchase items with lucky rather than unlucky price end- because some research has suggested positive outcomes
ings. Conversely, low-price items involve less inherent risk, from perceived globalness (e.g., Davvetas, Sichtmann,
thus reducing the need for luck and superstition. Another and Diamantopoulos 2015; Swoboda and Hirschmanna
consideration is that low-price items have a smaller price 2016). In these cases, the price cue would play an in-
window than high-price items. As such, price changes for formative role as part of a global consumer culture po-
low-priced items represent a comparably larger share of sitioning effort that appeals to consumers with a strong
total price. Accordingly, price-setting practices of low-price global identity (Westjohn, Singh, and Magnusson 2012)
items may be more driven by economic necessities than or those exhibiting a global consumption orientation
by superstitious associations. Therefore, we propose, (Westjohn et al. 2016). It is even possible that Western
managers may deliberately use unlucky price endings to
H2: The occurrence of the price-ending digit 8 (4) provoke cognitive dissonance in hopes of motivating
is more (less) common among ending digits of more information processing and elaboration of intrinsic
advertised prices for high- versus low-price items. product attributes (Gelbrich, Roschk, and Gafeeva 2016;
50
RMD
41.1
40 RMSD 36.5
Percentage of Prices
31.8
30 28.0
20
15.9
12.6
10.1
10
1.6 .9 1.1 1.6 1.8 1.4 2.5 1.7 2.2 1.6 2.3 2.4 3.0
0
0 1 2 3 4 5 6 7 8 9
Digit
Notes: Digits exceeding chance probability of 10% are overrepresented. The chance probability for remaining digits after removing overrepresented digits from each distribution is
1.58% for RMD and 1.94% for RMSD.
Differences in evaluation of price offers are likely to be Participants read a scenario in which they were told to
strongest under conditions of high superstition and high assume that they were going to purchase a new product.
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*p < .05.
Notes: LLCI = lower limit confidence interval; ULCI = upper limit confidence interval. We calculated 95% bias-corrected bootstrap confidence intervals using Hayes’s (2013)
PROCESS macro based on 10,000 bootstrap samples. Age, gender, education, and income were included in the model as controls. Only income was significantly related to
price attractiveness (b = −.43, t = 2.98) in the lucky price condition.
H5: For a foreign brand, a localized Eastern pricing market research firm as in Study 2. The resulting sample
strategy has a positive effect on (a) brand attitude consisted of 132 responses. Average age of respondents
and (b) price attractiveness, mediated by the was 37.4 years, and 49.2% of respondents were female.
brand’s perceived local image. Monthly household income ranged from S$3,300 to S
$9,399 for 50.7% of respondents, and 62.1% had at least a
Although perceived local image should have a positive Bachelor’s degree. Participants read the same scenarios
relationship with brand attitude, we expect the relationship using the same products and descriptions, with the fol-
to be attenuated by a person’s degree of cosmopolitanism. lowing exceptions. First, instead of presenting lucky and
Hannerz (1990) describes cosmopolitanism as an orienta- unlucky prices, we presented Eastern pricing (i.e., lucky 8
tion of openness toward divergent cultural experiences. price ending) and Western pricing (i.e., 9 price ending).
Such an orientation suggests an affinity for the novel and the Table 2 presents descriptions and prices. Second, par-
foreign, which would dampen the relationship between ticipants were informed that the product was offered by
perceived local image and brand attitude. Similar effects a foreign company with a fictitious brand name, ATL.
have been reported in Swoboda, Pennemann, and Taube After reading the description, respondents evaluated the
(2012), in which the effect of perceived brand localness on brand’s local Singaporean image, answered items to as-
retail patronage was weaker for consumers with a strong sess their level of cosmopolitanism, indicated their atti-
global identity, and in Westjohn et al. (2016), in which tude toward the brand, and evaluated the product’s price
people with a local consumption orientation favored lo- attractiveness.
calized positioning of both foreign and domestic brands.
Because price attractiveness is driven by superstition, we do Validity and Reliability. We examined factor loadings and
not expect any influence of cosmopolitanism on the local Cronbach’s alphas (see the Appendix). An exploratory
image–price attractiveness relationship. Thus, we hypoth- factor analysis revealed that all items loaded significantly on
esize that the greater a person’s cosmopolitanism, the their intended constructs with the factor structure ac-
weaker the effect of perceived local image on brand attitude. counting for 83% cumulative variance. All item loadings
exceeded .70, and Cronbach’s alpha values ranged from .93
H6: Cosmopolitanism weakens the relationship be- to .96. Construct correlations appear in Table 3.
tween the brand’s perceived local image and
brand attitude. Analysis and Results
Path
Coefficient t-Value LLCI ULCI
*p < .05.
**p < .01.
***p < .001.
Notes: LLCI = lower limit confidence interval; ULCI = upper limit confidence interval. We calculated 95% bias corrected bootstrap confidence intervals using
Hayes’s (2013) PROCESS macro based on 10,000 bootstrap samples. Age, gender, education, and income were included in the model as controls, with none being
significant.
firms can use price in an informative role to signal locali- (e.g., nonethnocentric consumers from developing countries
zation efforts to improve brand attitude. who admire the lifestyles in advanced economies; Batra
et al. 2000), it is also possible to improve attitude toward the
The results indicate that lucky number price endings make brand through localization. This research evidences that
a difference in consumer responses when the price offer is localizing pricing practices to fit cultural superstitions en-
of high personal relevance (high involvement) and when hances consumer attitudes toward the brand indirectly
respondents hold superstitious beliefs (high superstition). through the brand’s perceived local image. Other emerging
The moderating effect of involvement raises interesting research has suggested that the importance of a local versus
questions with respect to the decision-making processes global image varies by product category (Davvetas and
consumers use. In high-involvement conditions, consumers Diamantopoulos 2016). However, as a boundary condi-
are more likely to consider many attributes and simulta- tion, the findings further indicate that high degrees of
neously combine them to form an overall evaluation, in cosmopolitanism among consumers dampen the positive
which positive attributes compensate for negative attri- localization effect on brand attitude. This implies that firms
butes (Gensch and Javalgi 1987). This sort of compensatory specifically targeting cosmopolitan-minded consumers may
decision-making process suggests that the lucky price cue have more success with a Western price ending in 9, which
would be one of several attributes evaluated. However, in a would signal foreignness, whereas firms wanting to appeal
compensatory decision-making process, not all attributes to a more tradition-minded segment may have more success
are equally weighted. Although we did not measure attri- with an Eastern price ending in 8. In summary, pricing
bute weights in this research, the findings imply that lucky strategy should support the overall positioning strategy of
price endings carried substantial weight. Because the sa- the firm.
lience of superstitious numbers in prices are culture specific,
we expect that the substantial weighting given to the lucky Managerial Implications
price ending is also culture specific.
Pricing policy is particularly important for international
Localizing with Superstitious Pricing. Study 3 also re- marketing managers because it is the only source of revenue
vealed that foreign firms can use price in its informative in the marketing mix. Results show that lucky pricing is
role to create a more localized image of the brand and practiced by managers in Singapore (Study 1) and that
subsequently improve attitude toward the brand. While Singaporean consumers favor number 8 as a price ending
brands of nonlocal origin, especially those from Western (Studies 2 and 3), rendering superstitious beliefs a sa-
cultures, can appeal more to consumers in certain contexts lient external cultural pressure to localize. The independent
Given the combined evidence from this study and other Finally, drawing on related findings, we assumed that
similar studies, the results are generalizable broadly within marketers’ practices accommodate Singaporean con-
Singapore and to other cultural communities in Asia that sumers’ superstitious beliefs. Further research could
hold traditional Chinese beliefs. However, generalizability investigate the underlying direction of causality either
to the Chinese diaspora outside of Asia may depend on confirming the present assumption or potentially finding
the concentration of the community. A large community evidence for a condition in which both directions occur
would facilitate more intracultural interaction and make it simultaneously, which seems reasonable because market
easier to maintain a sense of traditional home culture; practices represent a component of a society’s cultural
however, small groups may not be able to successfully beliefs. In that regard, future studies could further shed
maintain home culture traditions when living in a foreign light on the motivation of managers to engage in su-
culture. perstitious pricing.
Construct Loading
Superstition (Study 2; adapted from Carlson, Mowen, and Fang [2009]; a = .89)a
1. I do not want to lose things that bring me luck. .68
2. I sometimes carry good luck charms with me. .85
3. I sometimes perform little rituals to bring good luck. .81
4. I must admit that sometimes I act like I am superstitious. .84
5. People who know me would say that I am superstitious. .74
Construct Loading
Price Attractiveness (Studies 2 and 3; adapted from Janiszewski and Lichtenstein [1999] and Lichtenstein,
Burton, and Karson [1991]; Study 2: a = .96; Study 3: a = .96)
1. At a price of S$[price] what is your opinion of this deal? (1 = “poor,” and 7 = “excellent”) .94b/.97c
2. At a price of S$[price] what is your opinion of this deal? (1 = “unfavorable,” and 7 = “favorable”) .98/.96
3. How attractive is the [product] at a price of S$[price]? (1 = “unattractive,” and 7 = “attractive”) .91/.91
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