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Why .95?

daVe.. (Student) (1431 Points)

26 November 2008

For those of you who know the shoe making giant Bata India Ltd, it must have really excited you to find out their pricing Strategy.

All Bata products used to end with .95 Rupees.

Ex: Rs. 499.95

Of course now they've decided to round off their prices to the nearest rupee.

But then, do you know the reason behind the .95 pricing policy?

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6 Replies

CA RAMESH KUMAR AHUJA (CA, DISA, LLB) (5452 Points)
Replied 26 November 2008

May be , to have a unique identification

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CA. Yogesh Malpani (Chartered Accountant) (216 Points)
Replied 26 November 2008

Zero as per some people is considered omen (bad) so they price their products like this even branded clothes are being priced as 0.99 for this reason only

daVe.. (Student) (1431 Points)
Replied 26 November 2008

Date:03/08/2005 URL: https://www.thehindubusinessline.com/2005/08/03/stories/2005080300300100.htm

Back Bata rounds off `95 paise' price tags

Vipin V. Nair

Kochi , Aug 2

FOR decades, it was a price tag that drew instant jokes, sarcastic comments and sometimes even arguments over consumer rights, but ending it all, Bata India has withdrawn its famous 95 paise pricing.

Now Bata chappals, shoes and other footwear are priced sans the 95 paise. Bata prices still stop at `9' (such as Rs 499), but the two decimal points in the price that made you feel like sheepishly asking the five paise back, are gone.

"I have seen it almost throughout my stint with Bata," a manager of a Bata showroom, who has put in around 40 years with the company, said.

He remembers that Bata sales people would also be curious about the 95 paise tag when they joined the company. They would be later taught at training sessions that it was a strategy to begin sales talk with buyers curious about price like Rs 299.95.

"It would automatically create interest in the product. And from there salesmen can start their talk," he said. The Bata price also had a psychological impact on the prospective buyers as it fell short of an amount that might have looked like a high price.

Also, the price tag was devised to communicate to customers that Bata values even their five paise. "We used to religiously return the five paise in those days when the coin was available," he said.

There is also an unconfirmed theory that Bata, then headquartered in Kolkata, came up with a price of Rs 124.95 to avoid an entry tax, which was levied on products priced at Rs 125 and above.

Bata India officials said the company had decided to do away with the most distinctive pricing in the country because the five paise coins have now gone out of circulation.

"Returning the five paise to customers was becoming an issue. There are people who would insist on getting it back," they said.

But the company did try to keep the price going by trying out various things. "We used to offer customers candies, or told them that for every five paise they did not take back, we would put another five paise and donate the amount to Missionaries of Charity. But we realised later that no such thing was working," they said.