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How Context Impacts Value Perception

Source: AI generated image (Dall-e)

In the vast world of marketing and sales, understanding how consumers perceive the value and price of products is fundamental. In this sense, the results of this research offer us a window into this complex process, showing that the context in which products are presented plays a fundamental role in how we evaluate their value and price. Below, I present how these findings can transform marketing strategies, presenting products in a way that resonates with consumers.

The Importance of Context

Imagine you are looking for a lamp. In one store, you see a model you like for $100, surrounded by lamps costing more than $500. In another, the same lamp is alongside options for $50. In which store does the lamp seem like a better deal? Surprisingly, research suggests that we tend to see the lamp as more valuable and less expensive when it is surrounded by more expensive options. This is because the context (or the pricing environment in this case) affects our perception automatically, without us even realizing it. This is part of what is known as “anchor pricing” or “anchoring.”

However, there is something even more surprising. It is possible to generate a context that favors the perception of value without having to put other products around. Researchers found that there were other stimuli that produced the same effect. For example, putting high figures in the product description before presenting the price.

It is possible to generate a context that favors the perception of value without having to put other products around.

According to this concept and continuing with the example, the next Ikea lamp could be described as follows to improve its value perception: “White table lamp with more than 10,000 units sold globally.” It’s important that this message is before the price and ideally more highlighted than the price itself.

Likewise, the main image of this post shows another form of implementation. At the end of the aisle, the sign reads “Grown at 1500 meters above sea level.” In this example, the figure “1500” is what produces the anchor effect, and elevates the value perception of ground coffee at $9.95 a pound.

The Effect of High Prices

The authors of the study demonstrated that products evaluated in a context of high prices are perceived as more affordable compared to when they are presented in a context of low prices. This not only changes our perception at the moment but can also influence how we value similar products in the future, even in different situations or product categories.

This study reminds us that in marketing, every detail matters. Something as simple as the price context can have a profound impact on how consumers view and value a product. In an increasingly saturated market, understanding and applying consumer psychology in our marketing strategies is not only useful, it is essential to stand out and connect with customers in a meaningful way.

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