Will Consumers Ever Stop Fixating on Price?

This week, we've done a lot of discussion about how pricing can influence marketing strategies. People have varying perspectives on how pricing plays a role in consumers' likelihood to purchase items and re-purchase. We discussed EDLP (everyday low pricing), as opposed to Hi-Lo pricing. Which is more effective? I'd have to say that is subjective, as well as dependent on the particular company enabling the strategy. One of the articles we read was entitled How to Stop Customers from Fixating on price, by Marco Bertini and Luc Wathieu. This article had a lot of interesting information about how marketers can utilize pricing strategies to gain an advantage, and stimulate interest from their consumers.

The article discussed four pricing moves that are perceived to be ways to diminish the salience of price in a purchase transaction. The four moves are; use price structure to clarify your advantage, willfully overprice to stimulate curiosity, partition prices to highlight overlooked benefits, and equalize price points to crystallize personal relevance. Of these four points, I think that the first two are extremely relevant and interesting. In our discussions about marketing strategy, it is always stressed that brands clearly let consumers know what their advantage is. What is your brand's USP that will help gain an edge over competition? Not only is it important to understand it as a brand, it is important that consumers understand it. By using price structure to do this, consumers may get a better understanding about why your brand has an advantage that justifies paying more than what you would pay for a competitor's product.

"Willfully overprice to stimulate curiosity": immediately when I read this, I thought of materialism. Although a lot of consumers are price sensitive, many are also materialistic. Why buy a plain black fleece at the store for $30 if you can pay over $100 to have the North Face label? I'm not really sure. Although I am definitely guilty of leaning toward name brand products, it's kind of silly when you think about it. You are paying a significantly larger amount for a product that might be almost the same. This goes for low-involvement products as well as high involvement products. But, even though "materialistic purchases" could be wasting consumers' money, it is putting a lot of money in the hands of these companies.

What exactly is a materialistic purchase? I'd say, it is when a consumer buys a brand over its competitors because their higher pricing because they think it means it has higher value. This is genius for marketers. Why do you think Apple is so successful? Yes, I think that their products work very well for my personal technological needs, but are they REALLY worth the amount of money I pay? Maybe not. I might just be one of those consumers looking to have the "trendiest" and well-known technology, made by the most popular brand in the industry. This reminds me of groupthink. This is a concept I've learned in a number of marketing courses as well as communication courses. People often make decisions, including purchase decisions (in this case), based on what the group of people around them do. If one person buys the most expensive brand because they think it has the highest quality, their friend might do the same thing. This high price will stimulate curiosity, as stated in the article, and lead to another purchase. That curiosity may lead to extensive W.O.M. among consumers. "Why do you pay so much for Apple products?", might lead to a conversation about why Apple products are so great.

So, I don't think consumers will ever stop "fixating" on price. In a world where people often make money to spend money, it's tough to say that prices won't have a large influence on purchase decisions. But, marketers can use this to their advantage and let pricing aid their marketing strategies.