IT IS NOT ALL ABOUT REDUCING PRICES TO BOOST SALES – 3 OBSERVATIONS Have you ever looked at a product and then looked at the price and come to the conclusion, based on the price, that the quality of the product must be low? I certainly have. Social psychologist, Robert Cialdini, noted that, “in markets […]

IT IS NOT ALL ABOUT REDUCING PRICES TO BOOST SALES – 3 OBSERVATIONS Have you ever looked at a product and then looked at the price and come to the conclusion, based on the price, that the quality of the product must be low? I certainly have. Social psychologist, Robert Cialdini, noted that, “in markets in which people are not completely sure of how to assess quality, they use price as a stand-in for quality”. We all do it, right? When people who know nothing about technology pay $200 more to purchase an Apple iPhone over the Samsung equivalent, they are, at least in part, using price as a measure of quality. When people who know nothing about engineering pay $700,000 for a Ferrari, they are, at least in part, using price as a measure of quality. When people pay $200 for a bottle of wine, they are, very often,…