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Eastern Versus Western Culture Pricing

Strategy: Superstition, Lucky Numbers,


and Localization
Stanford A. Westjohn, Holger Roschk, and Peter Magnusson

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.

Keywords: price endings, localization, adaptation, East–West cultural differences, superstitions

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)

Eastern vs. Western Culture Pricing Strategy 1


23% of Americans believing that 7 is a lucky number, and According to Singapore’s 2010 census, approximately one-
12% indicating that 13 is a sign of bad luck. In comparison, third of the population practices Buddhism (33.3%) and
in the Eastern culture of Singapore, superstitious beliefs speaks Mandarin at home (35.6%) (Department of Sta-
may be even more pervasive. Forty-seven percent of medi- tistics Singapore 2010). Yet Western elements are also
cal professionals indicated that anticipation of a good ap- present. The second-largest religion is Christianity
pointment foreshadowed a bad appointment, and 35% (18.3%), and English is the second-most-spoken language
admitted acting on their superstitions (Lim et al. 2007). at home (32.3%). Thus, Singapore is a city-state where
Belief in superstitions also extends to high-level managers in Chinese culture is exposed to and integrated with Western
Singapore, with one study finding that 64% have used feng business practices. As a result, it offers a unique setting in
shui experts to create a harmonious “lucky” environment which to investigate whether superstitions have maintained
(Tsang 2004). their salience with respect to pricing.

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

2 Journal of International Marketing


marketing managers about the importance of identifying attempt to achieve the sense of control in the absence of
relevant cultural differences such as superstition that have actual primary control (Rothbaum, Weisz, and Snyder
implications for the localization of the marketing mix. 1982). Rothbaum, Weisz, and Snyder (1982) identify four
types of secondary control: predictive, illusory, vicarious
and interpretive. Illusory control is defined as the alignment
CONCEPTUAL DEVELOPMENT with luck to share in the power of a greater force, and it
Superstition applies in instances of superstitious behavior.

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

Eastern vs. Western Culture Pricing Strategy 3


that consumers prefer a lucky versus unlucky number of with good fortune (Schindler 2009; Simmons and Schindler
units per pack (Block and Kramer 2009). However, with 2003).
respect to price setting, (un)lucky numbers play a prominent
role in Eastern, but not Western, cultures, which we discuss The reason superstition may have a stronger effect on price
next. setting in Eastern than in Western cultures has been at-
tributed to different conceptualizations of humans’ relation
Price Endings in Eastern and Western Cultures to nature (Kellert 2005; Kluckhohn and Strodtbeck 1961;
Simmons and Schindler 2003). In the Western Judeo-
The Role of Price Endings in Consumer Decision Making. Christian perspective, there is a tendency to view humans
Price endings are important because of the complex role as superior to nature, and as such, nature can be mastered
price plays in the consumer decision-making process. In- (Kellert 2005). This inclination treats nature as separate
formation processing theory suggests that consumers use a from humanity (DeMooij 2010). In contrast, traditional
variety of choice strategies that combine the use of intrinsic Eastern views portray a fundamental oneness that binds
and extrinsic cues in any given choice situation (Olshavsky, humanity and nature (Kellert 2005). Eastern reverence for
Aylesworth, and DeAnna 1995). The price of a product nature is linked to Buddhism and Hinduism, which affirm a
serves as a stimulus in this process that can play an allocative human obligation to respect nature (DeMooij 2010; Kellert
role (i.e., capturing the economic allocation [cost] of con- 2005). The respect for the supernatural as part of the
sumption) or an informative role (e.g., signaling quality or Eastern reverence for nature is perceived as a reason why
prestige) (Lichtenstein, Ridgway, and Netemeyer 1993; superstitious beliefs are more salient in Eastern price-setting
Olshavsky, Aylesworth, and DeAnna 1995). From the practices (Simmons and Schindler 2003). Thus, when
perspective of a contingent processing view, consumers may pricing includes superstitious numbers, the price cue takes
employ a strategy that includes price in its informative on an important informative role (i.e., foretelling one’s
role, allocative role, or both (Olshavsky, Aylesworth, and fortune with respect to the product) rather than primarily an
DeAnna 1995). allocative role, implying that (un)lucky numbers influence
attitudes toward the product, price, and even willingness
In the informative role, price serves as an extrinsic cue that to buy.
generates expectations about the product and can be used in
the decision-making process (Mitra 1995). As familiarity Lucky 8 and Unlucky 4
with the product and availability of product attribute
information increase, consumers tend to rely less on the The lucky and unlucky connotations of the numbers 8 and 4
price cue in evaluating the product (Mitra 1995; Rao and stem from phonetic associations to prosperity (8) and death
Monroe 1988). However, superstitious beliefs with respect (4) in Mandarin Chinese (Pellatt 2007). Prior research
to (un)lucky pricing may carry an inordinate amount of has provided empirical evidence that the lucky 8 is over-
weight when a price contains an (un)lucky number. We represented as a price ending digit in China (Nguyen,
argue that in the context of cultures that recognize super- Heeler, and Taran 2007; Simmons and Schindler 2003).
stitious numbers in pricing, the price cue plays an infor- Regarding the unlucky 4 in China, prior findings are
mative role that can nonconsciously activate superstitious mixed, with one study reporting an underrepresentation
associations in the mind of the consumer (Devine 1989). of the digit 4 (Simmons and Schindler 2003) and one
study finding no underrepresentation of the unlucky 4 in
Differing Perspectives of Superstition. The literature on advertised prices (Nguyen, Heeler, and Taran 2007).
price endings portrays a general tendency that Western
pricing practices are not guided by superstitious beliefs, Although previous research has found evidence of super-
whereas Eastern practices are (Schindler 2009). In Western stitious effects of (un)lucky number on prices in Chinese
cultures, the price endings 0, 5, and 9 dominate for reasons cultures, it is possible that Western influences, moderni-
apart from superstition (El Sehity, Hoelzl, and Kirchler zation, and globalization have reduced the use of super-
2005; Nguyen, Heeler, and Taran 2007; Schindler and stitious pricing, particularly in Singapore, popularly termed
Kirby 1997). The endings 0 and 5 are preferred in the as the place where “east meets west.” While economic
decimal system because their high cognitive accessibility, development and Western influence may have had some
while the 9 ending is favored because it causes an un- effect, there is reason to believe that a society’s broad
derestimation effect on the overall price (Schindler and cultural heritage (e.g., Confucian) leaves an imprint that
Kirby 1997). In contrast, in Eastern cultures there is an endures despite modernization (Inglehart and Baker 2000).
overrepresentation of the digit 8 because of its association Superstitious beliefs are likely to fall into the latter category

4 Journal of International Marketing


of the persistent imprint because they can be traced back Eastern Versus Western Brand Origin
thousands of years and can be expected to continue to
thrive in modern times (Jahoda 1969; Vyse 2014). The second factor influencing the use of localized super-
Therefore, given the salience of Eastern values and Chinese stitious pricing is brand origin. Although anecdotal evi-
as spoken language, we posit that the superstitious dence, such as the example of Apple’s pricing in China,
meanings of the numbers 4 and 8 translate into the suggests that some Western firms localize pricing with re-
multicultural social life in Singapore. Thus, we predict the spect to superstitious numbers in Eastern culture, we expect
following baseline hypothesis that replicates findings from that firms with origins in Eastern cultures will be more likely
other Eastern societies: to follow this practice. The expected reluctance of Western
brands to adopt superstitious pricing may be influenced
H1: (a) The lucky digit 8 is overrepresented and (b) the by differences in how Eastern and Western cultures view
unlucky digit 4 is underrepresented among end- prices. The most popular ending digit in Western pricing is
ing digits of advertised prices in Singapore. the number 9 (Kreul 1982; Schindler and Kirby 1997),
which has been attributed to what is called “the drop-off
Price Level tendency” (Basu 1997; Brenner and Brenner 1982). The
drop-off tendency suggests that consumers are more con-
Furthermore, we expect that the occurrence of the price- cerned with the digits to the left of the price than the digits
ending digits of 8 and 4 to be influenced by contextual to the right. This suggests that if consumers “do not fully
factors. We predict that the tendency to prefer lucky and consider the rightmost digits when evaluating a price, it is
avoid unlucky price endings is more pronounced among in the interest of the seller to make these digits as high as
high- (vs. low-) priced items for the following reasons. High- possible. Thus, managers tend to choose 9, the digit of
priced items are often a proxy for more complex and high- highest value” (Schindler 2009, p. 19). The effectiveness of 9
involvement buying decisions that include greater risk for endings is particularly pronounced when it has the effect of
the buyer (Kotler and Armstrong 2012). Such risk may act lowering the left-most digit (Schindler and Kirby 1997) or
as a stressor and can be viewed as a mechanism to enhance when it conveys a discount or low-price appeal (Schindler
perceived control (Baronas and Louis 1988) by activating 2009). In summary, Western pricing practices are based on
the secondary control processes that leads to superstitious the idea that consumers will devote minimal processing
behavior (Hamerman and Johar 2013). resources of the right-most digit (RMD).

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;

Eastern vs. Western Culture Pricing Strategy 5


Petty, Unnava, and Strathman 1991). Combined, these ar- supermarket, 6.2% media and news, 5.4% telecommunica-
guments suggest that superstitious pricing practices will be tion, 4.3% beauty and cosmetic, 3.2% restaurant, and 16.9%
more common for firms of Eastern versus Western origin. other (e.g., health services, do-it-yourself, wine, education).

H3: The occurrence of the price-ending digit 8 (4) is Variables


more (less) common among ending digits of
advertised prices for firms of Eastern versus We recorded all prices in Arabic numerals as they appeared
Western origin. in the price advertisements (e.g., S$168). Decimal digits
were included only when they actually appeared in the
advertisement (e.g., S$12.95). For each sampled price, the
STUDY 1: AD CONTENT ANALYSIS ending digit is represented by two measures: the right-most
Method, Data Collection, and Sample digit (RMD) and the right-most salient digit (RMSD). The
RMD measure uses the single right-most digit for repre-
Study 1 is a content analysis of advertised prices. Content senting the price-ending digit (e.g., the 5 in S$12.95). The
analyses have been widely employed in advertising research problem with the RMD measure is that it favors the zero as
in general (Eisend 2010) and in price-ending research in the ending digit for large prices (e.g., S$144,800). Therefore,
particular (e.g., Nguyen, Heeler, and Taran 2007; Schindler the RMSD measure has been proposed (Simmons and
2009). As such, content analyses produce a representative Schindler 2003). It assumes that a price’s right-most non-
sample of managerial price-ending decisions (Schindler and zero digit is more salient to consumers than zeros that follow
Kirby 1997). We chose to sample price advertisements from to the right. Accordingly, the price-ending digit is repre-
newspapers to achieve consistency with prior investi- sented by the first nonzero digit from the right (e.g., the digit
gations (Schindler and Kirby 1997; Simmons and Schindler 8 in S$144,800). In cases where there are no nonzero digits
2003). We gathered data from two newspapers, The Straits among a price’s ending digits, as in S$100,000, then the
Times (printed in English) and Lianhe Zaobao (printed in digit 0 represents the ending digit. Following Schindler
Chinese). They are the most widely read daily newspapers (2009), we use both measures to achieve consistency with
in Singapore, with circulations of approximately 449,200 prior research.
and 172,500, respectively (Singapore Press Holdings
2013). We were interested in comparing Eastern- versus Western-
based brands; therefore, we created a dummy variable
To rule out selection biases, we extracted every price ad- based on the company’s home country (i.e., where it is
vertisement found in both newspapers during the sampling headquartered), which we constructed according to the
period. For advertisements containing more than one price, procedures outlined by Cohen et al. (2013). Eastern brands
we selected the most prominent single price. We determined included SingTel and Hyundai, while Western brands
prominence by choosing the visually biggest price. If this included H&M and McDonalds. Finally, we use day
rule could not be applied, we followed reading direction (weekday vs. weekend) and newspaper (The Strait Times
from left to right and up to down and used the price on the vs. Lianhe Zaobao) as control variables to account for
left-most upper corner. Finally, we considered only adver- possible weekday and newspaper-related effects.
tisements in a business-to-consumer setting, because we
assume that business-to-business purchase decisions are less Analysis
susceptible to cultural superstition. In summary, we col-
lected 875 price advertisements from The Straits Times (N = All analyses were carried out for both RMDs and RMSDs.
708) and Lianhe Zaobao (N = 167) over a five-week period To assess H1, we test the occurrence of digits 4 and 8 against
during August and September in 2013. We selected fewer chance probability using binomial tests. Chance probability
prices from Lianhe Zaobao because this publication con- is determined according to Simmons and Schindler (2003).
tained relatively fewer price advertisements at the time of For the digit 8, as one out of ten digits, the chance prob-
the study. Nevertheless, the total sampled number of ad- ability equals 10%. However, the chance probability for the
vertisements is comparable to previous investigations digit 4 needs to be adapted in each situation depending
(Schindler 2009; Simmons and Schindler 2003). Sampled on the overrepresented digits. For instance, if one digit
prices range from S$.31 to S$299,999, with the median at is overrepresented with 55%, the other nine digits would
S$249. The advertisements comprise a wide array of in- occur 45% of the time, leaving a probability of 5% for each.
dustries: 22.3% furniture, 16.1% consumer electron- Therefore, to avoid underrepresentation of some digits that
ics, 10.7% (air) travel service, 7.5% automotive, 7.4% results from the overrepresentation of others, we consider a

6 Journal of International Marketing


digit underrepresented if it occurs less than chance would the sample. This leaves a resulting chance probability of the
predict among those digits that are not overrepresented. digit 4 at 1.58% (9.5%/six digits) in the RMD distribution
and 1.94% (13.6%/seven digits) in the RMSD distribution.
To test H2, price level, and H3, brand origin (Eastern vs. As evident in Figure 1, the digit 4 was used 1.7% in the
Western), we performed binary logistic regressions on digit RMD distribution and 2.2% in the RMSD distribution of
occurrence. We created dummy variables that represent the all advertised prices in the sample. Binomial tests confirm
occurrence of price ending 4 and price ending 8 in both the that in both distributions, unlucky pricing is practiced as
RMD and RMSD distributions, resulting in four dependent often as chance probability would predict (pRMD = .43,
variables (4-RMD, 4-RMSD, 8-RMD, and 8-RMSD). pRMSD = .45). Thus, H1b is not supported.
Using a hierarchical approach, control variables were
entered first, followed by the independent variables Price Level and Brand Origin. Binomial regression results
(price and brand origin). We log-transformed price to shown in Table 1 indicate that lucky pricing practices be-
linearize the relationship between price and digit oc- come more likely with increasing price (bRMD = .25, p < .01;
currence (Cohen et al. 2013). Brand origin was rep- bRMSD = .23, p < .01). Regarding the digit 4, the regression
resented by a dummy variable distinguishing between coefficients are in the predicted direction but do not reach
brands of Western versus Eastern origin. A significant significance (bRMD = −.17, p = .19; bRMSD = −.17, p = .13).
effect verifies that the digit occurrence depends on the Thus, H2 receives support for digit 8, but not for digit 4.
level of the independent variable. With respect to brand origin, results indicate that the digit 8
is more likely to be used as a price ending in advertisements
Results of Eastern compared with Western companies (bRMD =
1.88, p < .01; bRMSD = 1.46, p < .01). No significant ef-
Occurrence of Digits 8 and 4. Figure 1 presents the RMD fect is observed for the digit 4 (bRMD = −8.82, p = .99;
and RMSD distribution. For both distributions, the oc- bRMSD = −.73, p = .42). Thus, H3 is supported for the price
currence of the digit 8 is significantly greater than the ending 8, but not the price ending 4.
10% chance expectation (pRMD < .01, pRMSD < .01). Thus,
H1a is supported for the lucky price ending 8. For testing With regard to control variables, the occurrence of digits 8
the unlucky price ending 4, we first excluded the over- and 4 are independent from the newspaper from which the
represented digits in the RMD (0, 5, 8, and 9) and RMSD (5, price advertisements were sampled, while digit 8 appeared
8, and 9) distributions, which was approximately 90% slightly more often on weekdays when examining the RMD
(RMD = 90.5%, RMSD = 86.4%) of all advertised prices in (bRMD = −.38, p < .05). Thus, overrepresentation of lucky

Figure 1. RMD and RMSD Distribution in Percent

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.

Eastern vs. Western Culture Pricing Strategy 7


involvement. For this research, we view involvement as the
Table 1. Binary Logistic Regression Results degree of personal relevance of the price offer (Zaichkowsky
1994). Under conditions of high involvement, consumers
Digit 8 Digit 4 pay greater attention to differences in products (Howard
and Sheth 1969) and tend to search longer and for more
RMD RMSD RMD RMSD information with respect to potential purchases (Clarke and
Control Variables Belk 1979). This may suggest that intrinsic product attributes
Day (weekend = 1) −.38* −.19 −.24 −.54 play a greater role than the (un)lucky price cue; however, as
Newspaper (Lianhe −.20 −.00 .76 .85 an irrational belief, the superstitious belief may carry extra
Zaobao = 1) weight compared with other product attributes. Further-
more, Tsang (2004) finds that Chinese managers employ
Hypotheses their superstitious beliefs only when making highly important
PriceLN, H2 .25** .23** −.17 −.17
decisions, which would correspond with high involvement.
Brand OriginWestern vs. 1.88** 1.46** −8.82 −.73
Involvement and superstition appear to have similar goals
Eastern (Eastern = 1), H3
in a purchase context—that is, to offer some sense of control.
*p < .05. Indeed, Block and Kramer (2009) find that superstitious
**p < .01. consumers develop stronger performance expectations of
Notes: This table presents unstandardized regression coefficients.
products. Furthermore, superstitions serve not only to en-
hance perceived control but also to reduce anxiety (Vyse
2014). Thus,
pricing is consistent across both English- and Chinese-
language newspapers. H4: Consumers who are superstitious evaluate
(un)lucky price offers (less) more favorably
The results of Study 1 offer evidence of the practice of using than nonsuperstitious consumers under high-
lucky number pricing in an Eastern culture heavily influ- involvement, but not low-involvement, conditions.
enced by Western MNCs, especially in the case of high-
priced items, and is more often used by companies of Method
Eastern versus Western culture origin. The moderating
effects for price level (i.e., involvement) and brand origin Participants and Procedure. We relied on experimental
also raise important questions about how consumers re- design exposing the group of participants to one of two
spond to superstitious pricing. We attempt to answer these price conditions: lucky versus unlucky. To remain consis-
questions in the subsequent experimental studies. tent with the advertisement content analysis data, we fo-
cused again on Singapore. Respondents belonging to a
STUDY 2: EXPERIMENT Global Market Insite consumer research panel completed
an online survey and were screened for nationality and age,
Having established the usage of lucky number pricing ensuring that only Singapore citizens of at least 18 years of
with Study 1, in this study, we attempt to validate whether age completed the survey. The resulting sample consisted of
the practice is warranted. In other words, although com- 227 responses (lucky: n = 112, unlucky: n = 115). The
panies often use lucky number pricing, do consumers ac- demographic characteristics of the sample are broadly
tually respond differently to lucky versus unlucky pricing representative, with a mean age of 35.1 years, and a
schemes? The traditions of Eastern cultures, as described in monthly household income between S$3,300 and S$9,399
H1, supply the basic arguments for the practice of using for 56.8% of respondents. While women represent 59.5%
lucky numbers and avoiding unlucky numbers in the pricing of respondents, they often make the majority of household
of products. Research examining the issue from a consumer purchases and have even been purposely targeted for that
perspective has found that superstitious Taiwanese con- reason in other research (e.g., Alden, Steenkamp, and Batra
sumers are more likely to purchase a product if it has a lucky 2006). Respondents are highly educated, with 58.6%
(vs. unlucky) color and are even willing to pay more for a holding at least a Bachelor’s degree. Given that superstitious
package containing a lucky (vs. unlucky) number of units beliefs are irrational, a highly educated sample makes for a
(Block and Kramer 2009). rigorous test.

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.

8 Journal of International Marketing


They were given a brief description of the product, which significantly on their intended constructs, with the
remained constant between the lucky and unlucky price factor structure accounting for 73% cumulative variance.
conditions. We employed four different consumer elec- All item loadings exceeded .70, and Cronbach’s alpha
tronics products and accessories: a tablet computer, a digital values ranged from .89 to .96, exceeding commonly ac-
camera, a tablet screen protector, and a tablet case. We cepted thresholds. Construct correlations appear in Table 3.
included both core products and accessories as well as a
wide range of prices to ensure variance in involvement.
Table 2 provides a list of products, descriptions, and prices. Analysis and Results
Each participant was presented with one of the four
products, accompanied by either a lucky (price ending 8) or Using composite constructs based on the factor analysis, we
unlucky (price ending 4) price. After reading a description of analyzed the hypothesized relationships in SPSS with the
the product, respondents were asked to evaluate overall Hayes (2013) PROCESS macro model 1. PROCESS cal-
price attractiveness. We measured their evaluation of the culates 95% bias-corrected confidence intervals based on
price with a composite construct that assessed overall price 10,000 bootstrap samples, the results of which appear in
attractiveness, adapted from Janiszewski and Lichtenstein Table 4. We controlled for the potential effects of de-
(1999). Superstition (Carlson, Mowen, and Fang 2009) and mographic variables by including age, education, income,
involvement (Zaichkowsky 1994) were also measured us- and gender as covariates. In examining the unstandardized
ing existing scales. The Appendix reports items, loadings, coefficients, we find that the interaction term, superstition ×
and reliability. involvement, is significant for the lucky price group (b = .15,
t = 2.07), but not for the unlucky price group (b = −.04, t =
Validity and Reliability. To assess the validity and re- −.43). Thus, H4 is supported for lucky, but not unlucky,
liability of the latent constructs, we examined factor pricing. In summary, the results indicate that when consumers
loadings and Cronbach’s alphas. We conducted an have high involvement with respect to the product, then
exploratory factor analysis in SPSS. All items loaded superstition is significant, but only for lucky price endings.

Table 2. Product Descriptions and Prices

Study 2 Price Study 3 Price


Product Description (Lucky/Unlucky) (Eastern/Western)

Tablet computer · Brand new model S$588/S$544 S$588/S$599

· Wi-Fi only model

· 16GB
Digital camera · 16.1 Megapixels S$288/S$244 S$288/S$299

· 5× Optical Zoom

· 2.7 inch LCD Monitor

· microSD/micro SDHC/micro SDXC


memory card compatible
Tablet case · Magnetic construction S$68/S$64 S$68/S$69

· Protects against scratches

· Case can also be used as a stand for the tablet

· Available in many colors


Screen protector · Clear protective film produces no haziness,
less glare and no bubbles
S$3.88/S$3.44 S$3.88/S$3.99

· Shields and protects your screen from unwanted


scratches

· Easy to apply and easily removable without


leaving residue

Eastern vs. Western Culture Pricing Strategy 9


global firms. Recent research has suggested that increased
Table 3. Construct Correlations Study 2 and Study 3 industry risk decreases the amount of marketing localiza-
tion due to the fear of losing market-specific investments,
1 2 3 4 5 6 despite finding that localization enhances performance (Liu,
Gao, et al. 2016). The effectiveness of localization has
1. Superstition been highlighted in recent research identifying how for-
2. Involvement .07 eign luxury retailers have used strategic adaptation to raise
3. Price attractiveness .09 .34** brand awareness and build loyalty in China (Liu, Perry,
4. Eastern 8 pricing .10 et al. 2016). This is especially relevant because of the recent
pushback against globalization (Wolf 2016) and the rec-
5. Local price image .69** .20*
ommendation by General Electric chief executive officer
6. Cosmopolitanism .41** −.11 .32** Jeffrey Immelt to localize in response to such pushback
7. Brand attitude .77** .16 .69** .33** (Murray 2016). Thus, with Study 3 we investigate whether
the use of a localized Eastern pricing strategy (i.e., prices
*p < .05.
**p < .01. ending in 8) by a foreign brand enhances the brand’s
Notes: Study 2 included constructs 1–3. Study 3 included constructs 3–7. perceived local image and subsequent brand attitude and
price attractiveness. In addition, we examine the role of
cosmopolitanism as a moderator.
Findings from Study 2 lend support to the lucky number
pricing strategies as evidenced in Study 1. Consumers in We argue that just as price can play an informative role with
Singapore perceive the use of lucky number 8 as a salient respect to signaling the good or bad fortune related to the
attribute in determining overall price attractiveness, pro- product, it could also signal the firm’s desire and efforts
vided that they are in a high-involvement context. Thus, to position the brand as more local rather than foreign.
price seems to have played an informative role in the Indeed, the use of language, aesthetic style, and story
consumer’s decision-making process. Age, gender, educa- themes are tools used to develop a local consumer cul-
tion, and income were included in the model as controls, ture positioning (Alden, Steenkamp, and Batra 1999).
but only income was significantly related to price attrac- Thus, because price can play an informative role, it too
tiveness (b = −.437, t = 2.98) in the lucky price condition. could contribute to the development of a perceived local
image. Furthermore, a perceived local image, regardless
of brand origin, has been found to result in several
STUDY 3: EXPERIMENT positive brand outcomes; for example, brand prestige
and purchase intentions (Steenkamp, Batra, and Alden
Study 2 confirmed that superstitious consumers in a high- 2003), and retail patronage (Swoboda, Pennemann, and
involvement context consider lucky number pricing a sa- Taube 2012).
lient attribute with respect to price attractiveness. However,
the experiment included only products that were unbranded Malinowski’s (1948) theory on the anxiety-reducing effects
and of unknown origin. Relevant questions for interna- of superstition would explain the relationship between the
tional marketers are whether the pricing effects apply to localized 8 price ending and price attractiveness. However,
foreign brands and whether pricing can be used in an in- it would not necessarily explain the relationship with brand
formative role to signal brand localization efforts and en- attitude. Instead, social identity theory (Tajfel 1978) sug-
hance brand attitude by emphasizing a more “local” image. gests that people belonging to a social category, such as a
This seems particularly important given that the results nation, adopt strategies to maintain their in-group status.
from the content analysis offer evidence that Western firms Adopting positive attitudes toward brands perceived as
use lucky number pricing less often than Eastern firms. more local would be consistent with social identity theory.
However, our findings from Study 1 are unable to answer Thus, we propose that the Eastern 8 price ending will be
whether Western firms that localize their pricing ex- positively related to both price attractiveness and attitude
perience additional benefits in terms of a perceived toward the brand. We expect both of these effects to be
local image and brand attitude. We examine this ques- present to the extent that the Eastern pricing enhances the
tion in Study 3. brand’s perceived local image. Thus, we expect perceived
local image to mediate the relationship between the local-
According to Ger (1999), positioning based on the precept ized pricing and the outcomes of brand attitude and price
of localness can be an effective strategy for competing with attractiveness.

10 Journal of International Marketing


Table 4. Study 2 Results and Bias-Corrected Bootstrap Confidence Intervals

Path Coefficient t-Value LLCI ULCI

Lucky Price Condition (n = 112)


Superstition → Price attractiveness −.60 −1.61 −1.3454 .1363
Involvement → Price attractiveness −.14 −.51 −.6818 .4039
Superstition × Involvement → Price attractiveness .15* 2.07 .0068 .3016

Unlucky Price Condition (n = 115)


Superstition → Price attractiveness .24 .51 −.6968 1.1789
Involvement → Price attractiveness .66 1.93 −.0188 1.3418
Superstition × Involvement → Price attractiveness −.04 −.43 −.2256 .1454

*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

Method We created composite constructs for cosmopolitanism and


perceived local image of the brand. Using the Hayes (2013)
Participants and Procedure. We collected another sam- PROCESS macro model 14, we analyzed the effect of
ple from Singapore using Global Market Insite, the same Eastern lucky number pricing on brand attitude, mediated

Eastern vs. Western Culture Pricing Strategy 11


by the perceived local image of the brand, and assessed Price Level and Brand Origin. A second contribution
whether cosmopolitanism moderated the relationship be- emerges from the results of Study 1, which provides new
tween perceived local image and brand attitude. We in- insights on the moderating role of price level and the brand
cluded age, education, income, and gender as covariates origin of the price setter. Regarding price level, our results
and report the results in Table 5. In examining the un- indicate that superstitious pricing practices become more
standardized coefficients, we find that the Eastern pricing pronounced with increasing price. It can be assumed that
strategy has a significant direct effect on perceived local high prices suggest greater purchase involvement and higher
image (b = .61, t = 2.44) and a significant indirect effect risk, which suggest a need for the consumer to feel that
on both brand attitude (b = .39, t = 2.34) and price at- (s)he is in control. As such, pricing practices in Singapore
tractiveness (b = .48, t = 2.32). Thus, H5a and H5b are align with other empirical evidence showing that supersti-
supported. In examining the interaction, we find that cos- tious consumer responses are driven by perceived control
mopolitanism significantly moderates perceived local im- (Hamerman and Johar 2013) and involvement (Study 2).
age’s effect on brand attitude (b = −.12, t = −2.08), Thus, it seems appropriate that Study 2 found a lack of
indicating that increasing cosmopolitanism weakens the lucky number price endings for low-price items. A sec-
effect on brand attitude. Thus, H6 is supported. ondary explanation may also be that there is a smaller price
window for low-price items. Price increases or decreases
made to reach a desirable lucky number price ending
DISCUSSION represent a comparably larger share of total price for low-
Theoretical Implications price items. As a result, economic necessity rather than
superstition may drive the price-setting practices for low-
Overrepresentation of the Digit 8. This investigation price items.
provides three key contributions that shed light on how
superstitions affect price-setting practices and subsequent Notably, Simmons and Schindler (2003) report that
consumer responses in an Eastern culture heavily influenced lucky pricing practices in China are more likely among
by Western MNCs. First, Study 1 provides evidence that the low- rather than high-priced items. The contradictory
digit 8 is overrepresented as a price ending among price ads patterns between China and Singapore may be due to
sampled from two major Singaporean newspapers. Singa- differences in economic conditions between the coun-
pore offers a novel test given both the increasing influence tries. The lower incomes of Chinese households in
of Western MNCs in many Eastern cultures and the large general presumably translate to more purchases of
population of Chinese who live in non-Chinese cultures, goods at lower prices.
with an estimated number of more than 50 million (Wang
2012). In contrast to older studies, this study finds evi- Regarding the brand origin of the price setter, Study 1’s
dence of an evolving pattern of price endings. In Singa- results showed an imbalance between practices of Western
pore, there is an overrepresentation of not only prices versus Eastern firms not evidenced before. In particular,
ending in 8 (31.8%) but also prices ending in 9 (41.1%). Western firms adopt lucky pricing considerably less often
The Singaporean pattern is noteworthy because it reflects compared with the Singaporean and other Eastern-culture
the unique cultural diversity of the city-state, which is peers marketing in Singapore. These results are in line with
marked by the parallel existence of traditional Eastern our expectations that foreign Western firms are reluctant
and Western values. In this light, the lucky price ending 8 to adopt superstitious pricing perhaps because of the un-
can be interpreted as an element of traditional Eastern familiarity with the local cultural environment and the
culture, which communicates a superstitious belief rooted assumed limited processing of the RMDs (Basu 1997;
in Chinese language. In contrast, the price ending 9 can Zaheer 1995) or because of a deliberate attempt to use
be interpreted as an element of Western culture for its the price cue in an informative role, signaling the
wide usage throughout Europe and North America. In brand’s Western origin.
line with this notion, Parsa and Hu (2004) report that
the price ending 9 is actually perceived as a way to Consumer Responses to Lucky Pricing. The results of
communicate Westernization in Taiwanese quick-service experimental Studies 2 and 3 add in a third way to current
restaurants. Overrepresentation of the digit 8 was pres- knowledge. Prior research has been limited to descriptive
ent in the Chinese-language newspaper as well as the findings on the prevalence of practiced price endings.
English-language newspaper. Therefore, the lucky num- Therefore, Studies 2 and 3 aim to contribute to the literature
ber effect seems to be strong because it persists in a non- by providing insights into contextual effects of the salience
Chinese-language context. of superstitious price endings and investigating whether

12 Journal of International Marketing


Table 5. Study 3 Results and Bias-Corrected Bootstrap Confidence Intervals

Path
Coefficient t-Value LLCI ULCI

Eastern 8 pricing → Local image .61* 2.44 .1171 1.1150


Local image → Brand attitude 1.27*** 3.85 .6153 1.9191
Local image → Price attractiveness 1.21** 2.92 .3899 2.0369
Local image × Cosmopolitanism → Brand attitude −.12* −2.08 −.2318 −.0059
Local image × Cosmopolitanism → Price attractiveness −.08 −1.11 −.2230 .0624
Eastern 8 pricing → Local image → Brand attitude .39* 2.34 .0868 .7345
Eastern 8 pricing → Local image → Price attractiveness .48* 2.32 .0998 .9163

*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

Eastern vs. Western Culture Pricing Strategy 13


occurrence of both patterns necessitates the question about processing effort, thereby promoting more reasoned
direction of causation: Do practices mirror or strengthen brand choice and purchasing behavior. Moreover, a
consumers’ superstitious beliefs? According to current evi- counterintuitive approach to pricing using unlucky num-
dence, management practices accommodate consumer be- bers seems acceptable if the overall marketing goal is
liefs rather than reinforce them (Eisend 2010). Following to position the brand as “nonlocal.” There has been some
this direction of causation, managers may reflect cultural evidence to suggest that consumers from emerging mar-
beliefs and engage in superstitious practices not because of kets sometimes assign greater value to Western brands
their own fervent belief in them, but for the following two (Batra et al. 2000) and the use of the number 9 in the price
reasons. First, international marketing managers would ending can be perceived as a symbol to increase the
usually prefer not to alienate segments of potential buyers. brand’s Western image. The results may also be inter-
Thus, if a segment of consumers finds price endings as in- preted as a reflection that Western companies are less
formative cues that predict future experience with the bound by cultural ties than their Eastern counterparts,
product, it makes logical sense to accommodate these be- providing them with more leeway for their “cultural”
liefs, so long as there are no other negative trade-offs as positioning in the target market. It may simply not be a
a result of the superstitious price ending. In this sense, cultural imperative for foreign brands to follow the local
managers are making instrumental use of superstition. superstitious beliefs.
Second, managers may not want to tempt fate. In other
words, they may be so-called half-believers who perform Regardless of the reason why Western managers have been
superstitious acts to hedge against bad fortune (Campbell more reluctant to use superstitious pricing, the findings
1996; Tsang 2004). from Study 3 provide a cautionary tale. The foreign firms
that do use superstitious pricing benefit from a higher
The present results further indicate that the lucky number 8 perceived local image, which leads to more favorable
pricing phenomenon persists in a context where the Eastern brand evaluations.
culture is greatly exposed to and integrated with modern
business practices of Western MNCs. This finding, in
conjunction with the fact that the superstitious meanings LIMITATIONS AND FUTURE RESEARCH
are primarily carried by language, suggests that Chinese- DIRECTIONS
speaking consumers’ response to numeric price cues should
be similar in the Chinese diaspora worldwide. Thus, We experimentally tested the consumer responses to lucky
managers may find large enough communities of the number pricing using only product descriptions. In addi-
Chinese diaspora around the world to justify the use of tion, the number of products evaluated were limited, and
prices ending in the lucky 8. If we switch perspectives and services were not included. Whereas this method has been
interpret findings from a Chinese point of view, lucky used successfully before, one fruitful way to expand this
number pricing may be employed to stand out from the study with greater external validity would be to examine
traditional Western pricing schemes and may help com- actual product purchases. Perhaps a wide-scale analysis of
municate an authentic Chinese image within a non-Chinese actual purchases in Singapore based on checkout scanner
business environment. data could be used as data input for analysis. For example, a
comparison of sales volumes between similar products with
Finally, in Study 1, we noted that Western firms are less different price endings (lucky, unlucky, or neither) or the
likely to use superstitious pricing compared with their same product over time with different price endings would
Eastern counterparts. Yet, in Study 3, we found that foreign provide further insights into how superstitious pricing af-
firms that do use superstitious pricing (compared with the fects buying behaviors. Furthermore, this study focused
Western 9 ending) are perceived more favorably, mediated on product prices. Further research may also want to ex-
by perceived local image. This raises questions as to why amine how superstitious pricing affects service attractive-
Western firms are less likely to use superstitious pricing. ness, whereby human interaction is often more direct
Assuming that this difference is not due to a lack of cultural and central to the transaction (Wilson et al. 2012).
awareness, there must be a legitimate reason for not re-
sponding to the pressure to localize. Whereas the relative importance of lucky numbers can be
inferred from the results, it is unclear whether consumers
We can only speculate, but it is possible that some managers would eliminate a brand from consideration solely because
use such a strategy as a deliberate provocation of cog- it has an unlucky price ending. To address this, further
nitive dissonance to increase the amount of information- research should incorporate additional outcome variables

14 Journal of International Marketing


beyond the price attractiveness outcome, which we used in Findings also represent only one moment in time; thus, it is
Study 2. For example, future studies could be designed as a unclear whether superstitious beliefs have decreased over
choice scenario with a variety of attributes and alterna- time. One might think that with continued modernization
tives (compensatory decision making), some of which would of society, superstitions would fade or at least decrease in
include an unlucky price ending. legitimacy; however, as in the example of adult Thai men
buying dolls as talismans (Watcharasakewet 2015), su-
Studies 2 and 3 controlled for different demographic var- perstitions may simply become integrated with modern
iables. Results were largely nonsignificant, mirroring the life rather than displaced by it. Furthermore, longitudinal con-
limited explanatory power of demographics in prior re- tent analyses of price advertisements may reveal whether
search (Vyse 2014). Therefore, we suggest that future major societal impacts can shape marketers’ practices.
studies consider psychographic differences. For instance, it Given the function of superstition as a control illusion for
seems likely that neuroticism, or the tendency to experience reducing uncertainty, it seems conceivable that under times
negative emotions such as anxiety, is probably related to of economic difficulties, a more profound use of supersti-
superstition, which serves to reduce anxiety in situations tious market practices may be observed. In support for
marked by unpredictability and uncertainty. Likewise, such a notion, prior research has evidenced a correlation
thinking styles appear to account for differing irra- between the level of superstition and economic threat in
tional beliefs over sociodemographic factors (Aarnio Germany for the tumultuous years 1918–1940 (Padgett and
and Lindeman 2005). Jorgenson 1982).

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.

Appendix. Items for Construct Measurement

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

Involvement (Study 2; seven-point scales; adapted from Zaichkowsky [1994]; a = .92)


1. Irrelevant–Relevant .84
2. Unexciting–Exciting .79
3. Means nothing–Means a lot to me .85
4. Unappealing–Appealing .96

Eastern vs. Western Culture Pricing Strategy 15


Appendix. Continued

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

Local Price Image (Study 3; a = .94)a


1. By setting the price at S$[price], ATL is projecting a local Singaporean image. .94
2. By setting the price at S$[price], ATL is acting like a Singaporean company. .91
3. By setting the price at S$[price], ATL is trying to fit into Singaporean culture. .87
4. The price of S$[price] reflects traditional Singaporean beliefs. .84

Cosmopolitanism (Study 3; adapted from Cleveland et al. [2014]; a = .93)


1. I like to observe people of other cultures. .89
2. I am interested in learning more about people who live in other countries. .92
3. I enjoy exchanging ideas with people from other cultures and countries. .85
4. I like to learn about other ways of life. .85

Brand Attitude (Study 3)d


Thinking of the [product] offered by ATL, indicate your overall attitude toward the product.
aEvaluated on a scale of 1 = “strongly disagree” and 7 = “strongly agree.”
bStudy 2 loading.
cStudy 3 loading.
dEvaluated on a scale of 1 = “dislike very much” and 7 = “like very much.”

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