Unless you are Ebenezer Scrooge before his Christmas transformation, chances are you donít always buy the cheapest product. There are a number of reasons for this that are important to take into consideration when creating marketing material for your target audience.
The Psychology of Shopping
In some cases, buying the cheaper item makes more sense if it is a quality item on sale and/or you have a coupon. But in other cases, price and the perception of value are not the same thing. There are different things which influence this perception.
Emotions enter into purchasing decisions a lot more than most marketers might think. Studies have shown that consumers buy based on emotion and then try to justify their choice with logic, not the other way around. This can actually lead people to spend more than they can afford.
These emotions can cause some people to buy things they really donít need because they want to “keep up with the Joneses”.
The emotions that caused a person to buy in the first place can keep them coming back for more, a phenomenon known as choice support. It triggers people to become repeat customers, because once they have purchased from you, they will continue to do so to “prove” they made the right choice in the first place.
Branding is a shortcut for shoppers. Coke versus Pepsi, Wendyís versus McDonaldís… we all have individual tastes and preferences and buying by brand ensures we get what we want.
It can also be associated with quality, such as a designer dress or shoes. Think Timex versus Rolex and you will understand that some people buy luxury brands because of the name, quality and prestige of owning them.
Choice support is one of the reasons for brand loyalty. It is not just about the name on the label. It is also an “easy button” that tells busy people they will get their moneyís worth and/or get what they will like and need by doing business with that brand.
Price versus Value
An expensive car like a Lexus is prized because of the brand, the “wow” factor and the envy factor. A person who owns one will feel proud of the purchase and be happy to show it off. They will also be eager to dangle it in front of other people to arouse their envy. If we think about it, Nissan, Toyota and Lexus are all made by the same company. But it is the perception of value that drives Lexus sales.
Ethical considerations – that is, beliefs and values in the minds of the consumers, and in relation to the company as a whole – also drive sales. People are willing to pay more for organic food, for example, or items they feel are healthier or more ethically produced, such as grass-fed beef without any antibiotics, or non-GMO foods.
People buy “green cleaners” at a higher price than popular commercial brands because the perception is they are healthier and the person is doing their part to help the environment. Some people will buy only products with a Made in the USA label. Or they pay more for a hybrid version of the same car in order to support their personal values.
Understanding the psychology of shopping and using it to craft your offers can help you increase your sales and profits.