Price Perception and Network of Associations

The brain determines the value of items based on comparisons to similar products stored in its network of associations. Companies can alter these associations by changing the customer experience, such as Starbucks did by creating a continental European coffee house ambiance and renaming cup sizes. By doing this, the company shifted the perception of their coffee from a diner product to a high-end, unique experience, thereby influencing customers' valuation of their products.