If you’re trying to drive customers toward purchasing a particular product or service, you might try giving them something to compare it to. But this approach is not as simple as it seems.
New research suggests that products that are grouped with items that are more expensive will appear to be expensive themselves. On the other hand, when the same items are grouped with items that are less expensive, they are perceived as being less expensive.
However, it’s not entirely that simple. The equation changes when customers are given more information about the product and how it differs from others.
If advertising, marketing or displays are used to highlight a product’s features or differentiating characteristics, the juxtaposition of the products against other items changes the perception of price.
“When customers are given information that puts them in ‘discrimination’ mode, products seem less expensive when grouped with expensive items and more expensive when grouped with less expensive ones,” explained Marcus Cunha, Jr., of the University of Chicago, who conducted the study.
By giving customers information particular to the product, you are essentially putting them in the mode of choosing which of a particular product to buy , rather than whether to buy it at all, Cunha told BusinessNewsDaily.
This information can be especially useful for businesses that are trying to steer customers toward particular products, either because it’s a high profit item or because they have a lot in stock. It shows that when it comes to merchandising, product assortment is as important as branding and marketing.