What does in Value for Money matter?

One raining evening after a long walk in Oxford I came up to enter a symbolic place- Blackwell’s bookshop where my strong inspiration  by consumer neuroscience led me to buy a book “Brainfluence” by R. Dooley.

One of the core topics in the book that readers find across chapters is linked with the area on which I have had a lot of conversations with my colleagues- how to build the best brand and product value for money.

R. Dooley steps a bit back from this question and highlights that for consumers cost has the same brain association as usual pain does. “Buying pain- the activation of our brain’s pain center when paying for a purchase -increases when the price seems too high“.

Therefore, in order to deal with the associated pain, consumers make both conscious and subconscious evaluations of the cost “fairness”. In order words, perception that the product or service has a good value for money means for consumers that the product cost is fair.

Here I see two crucial points- first, value for money attribution to both conscious and subconscious  evaluations, and second, the importance of value for money for the overall buying pain reduction.

Considering the conscious value for money evaluations, it’s important to remember that “our brains aren’t good at judging in absolute values, but they are always ready to compare values and benefits“.

Hence, from my point of view, the most relevant idea here is anchoring that has been introduced by D. Arley in his book “Predictably Irrational”. Anchoring means that consumers evaluate fairness of the product prices taking into consideration different anchor prices. They might come from products within the category, but also can be other prices with which consumer has recently dealt.

So, if anchor prices are established then offers involving lower prices will be attractive to consumers and be perceived as offers with good value for money.

For subconscious evaluations might be important attributes associated with the overall shopping experience. In case of repeated purchases, consumption experience might also play an important role.

To sum up, there are several recommendations for marketers. In order to enhance the perceived product value for money, it’s important to:

1. Understand and refer to the right product anchors: evaluating the category in terms of the most relevant consumer anchors and/or introducing the most relevant anchors.

2. Make a price a bargain: leveraging sales prices, restating prices to make them look smaller (e.g. monthly rate vs an annual subscription cost), using ‘nice’ price communication (like ‘just’ or ‘small’).

3. Avoid repeated pain points: utilizing product bundles/sets when purchase decision is done only once.

4. Appeal to important needs associated with the product purchase.

5. Create strong shopping and consumption experience: levering the shopper marketing tools and enhancing second moment of truth.

Source: http:// www. pandarix. com/ why- pandarix/

Sources: 1. Ariely, D. (2010). Predictable Irrational: The Hidden Forces That Shape Our Decisions, Harper Perennial, New York; 2. Dooley, R. (2012). Brainfluence: 100 Ways To Persuade And Convince Consumers With Neuromarketing, John Wiley & Sons, New Jersey