Pricing strategies can significantly impact consumer behavior and perception, sometimes defying traditional economic assumptions. Increasing prices can sometimes boost demand, signaling seller confidence and quality to consumers. Prices are more than just numbers to consumers; they evoke feelings and create perceptions. For instance, consumers may expect a higher price for a product with superior functionality, and pricing it lower can lead to confusion and reduced sales. Companies often focus on cost reduction to lower prices, assuming it will increase sales, but this strategy can backfire. Being customer-focused means understanding consumer feelings rather than just their stated preferences.
In today’s episode, we continue our conversation with Rory Sutherland, UK Vice Chairman of Ogilvy, where he discusses how our decision making, especially as consumers, while often appearing irrational, is actually the result of us deploying heuristics that have served us well in situations of low trust or when we don't have all the information.
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This show is produced in collaboration with Wavelength Creative. Visit wavelengthcreative.com for more information.