Expectations Screw-up Observations
In the past, my brother and I have observed a very good way of pushing a product: start with a product that is similar in quality1 to the best products out there, then charge a whole whack more for it.
The reasons this works is twofold:
1) prestige value - consumers appreciate that they bought something exclusive
2) expected value - consumers assume that the more expensive product is better
But it turns out that there may be more involved than that. According to a recent paper by Antonio Rangel and colleagues from the California Institute of Technology, not only do consumers expect a more expensive product to be better, they actually interpret it to be better, too:
They asked 20 people to sample wine while undergoing functional MRI's of their brain activity. The subjects were told they were tasting five different Cabernet Sauvignons sold at different prices.This is not really a surprising finding; it's just the placebo effect, albeit in a consumption scenario rather than a health care scenario.
However, there were actually only three wines sampled, two being offered twice, marked with different prices.
A $90 wine was provided marked with its real price and again marked $10, while another was presented at its real price of $5 and also marked $45.
The testers' brains showed more pleasure at the higher price than the lower one, even for the same wine, Rangel reports in this week's online edition of Proceedings of the National Academy of Sciences.
In other words, changes in the price of the wine changed the actual pleasure experienced by the drinkers, the researchers reported.
Just another reminder to the woo crowd who push the "Don't knock it before you try it" piece of doggerel: your brain2 is very good at fooling itself - don't trust it.
1 It doesn't have to actually be better, but it can't be too much worse or else the illusion of superiority fails.
2 Actually all our brains - I don't want woos thinking I'm picking on them.