On Price versus Value

πŸ’Ž On the blurred lines between price and value (especially on Black Friday)

Black Friday (and now Cyber Monday) are marked clearly in shopping calendars around the world. The event started as an invention of an American organisation, the National Association of Retailers. Their aim; increase retail sales. An aim that has now well surpassed initial expectations.

For those unfamiliar, Black Friday and Cyber Monday events offer a limited number of discounted products to customers. Some retailers see customers queuing for days in advance to grab the best bargains. In many cases a retail frenzy ensues when the doors finally open.

Scarcity is one of the key factors behind the success of these shopping days. Retailers promote to customers that a limited number of items will be available at discount. Customers who might not have needed a new TV suddenly attribute additional value to it because of scarcity, turning them into must have items in conjunction with the discount

Remember, price does not equal value. This is important. Even though these shopping days provide discounts to customers, that is a reduction in price, the value of the product to a customer does not necessarily change. If they don’t need a new TV before the event, a discount is not going to change their need for it.

Limited or rare supplies are perceived by people as a threat to their freedom of choice, triggering a reaction to fight the threat and maintain their access to the resource.

Excerpt from: Product Gems 1: 101 Science Experiments That Demonstrate How to Build Products People Love by David Greenwood

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