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

This research evaluates the impact of prices ending with .99 in online travel portals for budget hotels in New Zealand and how it influences consumer purchasing behaviors. The research methodology includes a descriptive research design, random probability sampling, and data collection through interviews and survey questionnaires. The research aims to identify the prices ending with .99 set by budget hotels in New Zealand to influence consumer psychology and encourage effective buying decisions.

Running head: MANAGING RESEARCH
Managing research
Name of student
Name of University
Author note

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Table of Contents
1. Introduction..................................................................................................................................3
1.0 Background of research.........................................................................................................3
1.1 Research significance.............................................................................................................3
1.2 Problem statement..................................................................................................................4
1.3 Research aim..........................................................................................................................4
1.4 Research objectives................................................................................................................4
2. Literature review..........................................................................................................................5
Impact of Prices ending with .99.................................................................................................5
Influence on consumer buying behaviors....................................................................................5
Research gaps...............................................................................................................................6
Potential contribution...................................................................................................................6
3. Research methodology.................................................................................................................7
3.0 Hypothesis for the research....................................................................................................7
3.1 Research philosophy..............................................................................................................7
3.2 Research design......................................................................................................................8
3.3 Sampling technique................................................................................................................8
3.4 Data collection.......................................................................................................................8
3.5 Data analysis..........................................................................................................................9

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4. Implications of study...................................................................................................................9
5. Limitations.................................................................................................................................10
6. Conclusion.................................................................................................................................10
References......................................................................................................................................12

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Title: Impact of prices ending with .99 in online travel portals for the budget hotels in New
Zealand
1. Introduction
1.0 Background of research
The background of research sheds light on the fact that prices set by the budget hotels in
New Zealand on the online travel portals ending with .99 has created a positive impact on the
buying behaviors of consumers. The budget hotels have been using this marketing strategy by
providing discounts for the services provided and manipulating the price tags often by ending it
with .99, which is a common thing that the consumers often notice nowadays (Nickolayev &
Dennisov, 2010). It can be an effective sales tactic that influences consumer behaviors and
because the clients read the price from left to right the first digit resonates among them the most
and this allows the budget hotels to create a price sensitive experience by encouraging clients to
try out the $4.99 item rather than $5 item.
1.1 Research significance
The significance of the research is that it will focus on the budget hotels and are price
sensitive, due to which, prices are often discounted and kept like this to create a positive
psychological mindset among the people. This allows for reducing the amount of effort put
forward to make product decisions and at the same time, setting price as .99 can help in making
the service available with discount or on sale, which acts as a pricing cue to motivate the clients
regarding purchase (Mattila & Gao, 2016).

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1.2 Problem statement
The rationale of research focuses on the problem statement that shows that only budget
hotels are to be considered, which can be a problem and thus considered as the research
rationale. The research rationale is actually the problem of the research that also will focus on
quality over price and thus the price tag ending with .99 can also represent the item or service as
cheap, which can create negative mindsets among the clients (Wagner & Jamsawang, 2012). The
customers who pay in cash may face issues and they may pay $100 even when price of product is
$99.99, which can be another problem as well.
1.3 Research aim
The research aims to evaluate the impact of prices ending with .99 in online travel portals
for the budget hotels in New Zealand and how it contributes to the influencing of consumers
regarding their purchasing behaviors and buying decisions.
1.4 Research objectives
 To identify the prices ending with .99 set by the budget hotels in New Zealand to
influence consumer psychology and encourage buying decisions to be made effectively
 To evaluate various approaches for improving the effectiveness of psychological pricing
technique and influence consumer behaviors
 To assess the probable impacts of setting prices at .99 for influencing the choices of
clients and encouraging them to avail the services provided by the budget hotels in NZ
 To recommend various measures for improving the psychological pricing strategy
without compromising on the quality of services provided by the budget hotels

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

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

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Potential contribution
The literature review section contained the secondary data and information derived from
various sources, which could be later analyzed and interpreted for linking the research variables
and ensure accomplishment of research goals and objectives with ease and effectiveness
(Swarbrooke & Horner, 2012).
3. Research methodology
The research methodology is the most important chapter of the proposal that includes the
philosophy f research, design, ways of collecting and analyzing data and ensuring proper testing
of hypothesis to conduct the research appropriately (PETKOVSKI & MIRCHEVSKA, 2013).
3.0 Hypothesis for the research
H0: The prices ending with .99 in online travel portals set by the budget hotels in New Zealand
cannot influence consumer buying behaviors
H1: The budget hotels set prices ending with .99 for influencing the buying behaviors of
consumers and generate higher business revenue
3.1 Research philosophy
The research is conducted considering the budget and price sensitive hotels that set prices
ending with .99 to influence choices and purchasing behaviors of consumers. The three different
types of research philosophies are positivism, post positivism and interpretivism research
philosophies. The information will be derived from the sensory experiences considering the fact
that relevant knowledge and information are obtained with the inclusion of primary data (Nagle
& Müller, 2017). The hidden truths behind the research subject will be understood, which can

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assist in obtaining knowledge about the incremental facts and enhance the scopes for
observations, furthermore interpret the results effectively. The validation of existing theories and
concepts will also tend to make the research successful and thus the positivism philosophy will
be considered here as effective (Neuman, 2013).
3.2 Research design
The exploratory, explanatory and descriptive designs are used for conducting the
research. The exploratory research design presents theoretical data and information to define the
initial research and bring out new ideas that can be helpful for conducting future research
through extraction of information from existing research materials while the explanatory
research design analyses the cause and effect derived from the research. This lacked accuracy
and reliability, due to which the descriptive research design will be suitable, which could allow
determining the what and how of research and the results should be certain and relevant too
(Lambert & Lambert, 2012). It could also fill the missing gaps and link the dependent and
independent variables, i.e., influence of consumer buying behavior, depending upon the prices
ending with .99 for the budget hotels’ online portal, which is the independent variable here.
3.3 Sampling technique
The random probability sampling method should help in selecting respondents randomly
and obtain their responses while the non-probability convenient sampling technique could enable
arranging suitable time for managers of the budget hotels to provide their responses regarding the
setting of prices ending with .99 (Taylor, Bogdan & DeVault, 2015).

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3.4 Data collection
The process of collection involves both primary and secondary data collection. The
primary data constitutes of qualitative and quantitative data while the secondary data have
already been derived from secondary sources to represent the literature section. The qualitative
data will be obtained by conducting interviews with the manager based on their convenient time
when they can be available to provide their views and opinions regarding the research subject.
The quantitative data will be acquired by distributing survey questionnaires to them and
obtaining responses provided by them without any bias (Englander, 2012). The secondary
sources from which data could be collected could be websites, journals, articles, documents, etc.
3.5 Data analysis
The analysis of data will be done by using SPSS tool and later it will be interpreted to
bring favorable results. The analysis of data should be represented in tables, graphs and charts to
make the researcher understand with ease and derive positive outcomes (Creswell & Creswell,
2017).
4. Implications of study
The research methods and literature review section shows that it has contributed to the
creation of more scopes for conducting the research in a much more detailed manner. The
proposal could signify the outcomes derived to be used for managing a proper dissertation based
on the same research subject in the future as well (Flick, 2015). From the research, it can be
understood that none of the respondents were forced to take part in the survey process and the
data and information were authentic and genuine considering its impact on the research’s validity
and reliability. The research will be used to academic purposes only and not to obtain any kids of

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commercial benefits, which could also benefit further researches in the future considering the
missing areas to be explored as well (Panneerselvam, 2014). The research materials were
destroyed and made sure that it does not fall in wrong hands while some of the information were
stored properly considering prevention of unauthorized access for ensuring that data replication
or copyrights are violated while conducting research on the similar topic in the future (Simmons,
Nelson & Simonsohn, 2011). This also maintained the ethical standards of the research.
5. Limitations
The major limitations and constraints that might be faced could be the time and cost
constraints. There were language barriers due to which, responses were not provided by few of
the individuals involved in the survey process while there was skipping of questions due to lack
of knowledge and understanding of the questions (Brinkmann, 2014). The research has been
completed within the time that was assigned, still with the allocation of some more time and
additional financial resources, the missing areas would be explored and more time could be spent
to research the topic in a detailed manner.
6. Conclusion
The research highlighted the importance of setting prices ending with .99 to create
positive mindsets among customers to influence consumer buying behaviors. This could be
stated as a effective psychological pricing and effective marketing technique to draw in more
customers towards the price sensitive hotels and thus research was done for the same. The
objectives and hypothesis were aimed to be achieved and thus proper literature review had been

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provided along with the consideration of various research methods along with collection and
analysis of data to accomplish the research goals effectively.
Research timeline
Main activities/ stages Month
October
Month
December
Mont
h
Feb
Month
April
Month
June
Month
August
Selection of topic 
Collecting data from
secondary sources
 
Constructing the research
layout

Literature review   
Development of research
Plan
 
Selection of Appropriate
Research Techniques
 
Primary data collection  
Analysis & Interpretation
of Data which are collected
 
Conclusion 
Development of Draft 
Final Work submission 

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