We go through many phases when we decide to purchase a product. They may be conscious or unconscious phases. We examine the packaging, quality, brand, brand perceptions, price etc. etc. Even though these phases do not necessarily occur at the same time, price has an instant effect on our purchasing decisions.  

In recent years a major brand conducted a survey among consumers and asked this question: “Do you give importance to price when purchasing a product?” in other words they were questioning if price was a determinant in purchasing decisions. This part is hilarious J Responders tend to answer that price is not important when the question is addressed face-to-face. Out of humiliation? Perhaps..  After analyzing results of the survey the company in question places its products on the market without considering its prices. What happens next? Potential customers which responded to the survey that prices where not a determinant for them do not purchase the same product finding it relatively high. Results are a disappointment for the company.

What I’m trying to say is the most important factor taking role in our purchasing decisions is inevitably and without any doubt is the price. We may purchase a product because it is “cheap” or “expensive”. In either condition the price is crucial. We seek economical and quality products when purchasing fast consumer goods and question prices when purchasing products of an upper segment. We tend to believe that higher the prices, higher the quality. Is quality equal to high prices? That’s another subject for discussion.

I read two articles last week which presented facts about a research in United States. Research includes subjects tasting two different wine brands where one wine costs 10 dollars and the other 90. While subjects taste these two different “specimens”, researches measure the brain activity suggesting level of obtained satisfaction.  They suggest that while two bottles of wine are exactly the same product, subjects comment that they liked the 90 dollar wine better than the other. This state is evidenced with brain activity measurements as well.

I guess this points out how important price is effective on consumers. To tell the truth, every product may be the same but the important thing is how you market such product. Your brand is important as the perception of your customers. If you choose diversification, you can accomplish this by providing additional services or through your prices. If you can make a difference in your customers lives no matter how expensive your product is, your customers will be ready to pay more money for the same product.

For this entry I was inspired by the following articles;

http://www.economist.com/science/displaystory.cfm?story_id=10530119

http://www.searchengineguide.com/diane-aull/marketing-in-hard-times-pricing.php