Whenever you are thinking about buying something, price
plays a role in your decision process.
Consider going to a big box retailer like Bed, Bath, and Beyond and standing in front of the
wall of blenders. Chances are, you are not
a blender expert, and so you have to come up with some way to make your
choice. You use price in two ways to
help you out.
First, you use price to help you judge quality. Chances are, a very inexpensive blender is
also a low-quality blender. It may have
fewer settings and be made of cheaper materials. An expensive blender is generally assumed to
be a high-quality blender with lots of features and solid construction.
Second, you make a judgment about whether the product is a
good value. We generally don’t want to
overpay for something, and so we like to feel as though we are getting a good
value for our money.
An interesting paper by Torsten Bornemann and Christian
Homburg in the October, 2011 issue of the Journal
of Consumer Research explores the role of distance on the way that people
use price to judge quality and value.
I have written frequently in this blog about the role of
distance in thinking. Generally
speaking, when something is far from you in space or time, then you think about
it more abstractly than when something is near to you. Bornemann and Homburg suggest that distance
focuses you more on the role of price in predicting quality than on the
importance of value.
In one study, the manipulation focused on distance in
time. Participants were given a
description of a new e-reader. They were
either told that the product was coming out in 2 days or in 6 months. Some people were told that the e-reader was relatively
inexpensive (about $120), while others were told that it was relatively
expensive (about $250). Participants
evaluated whether the product was likely to be good quality, whether it was a
good value, and whether they were interested in purchasing it.
When people read about a product that was coming out in a
few days, the price had little impact on their judgments of quality. When people read about a product coming out
in 6 months, though, they thought the product would be much higher quality when
it was expensive than when it was inexpensive.
For judgments of value, though, the pattern was
different. When the product was coming
out in 6 months, price had little impact on people’s judgments about whether it
was a good value. However, when the product
was coming out in 2 days, people felt that it was a much better value when it
was inexpensive than when it was expensive.
Ultimately, people were least interested in buying the
product when it was coming out in 2 days and was very expensive. The focus on the high price in this situation
drove people away from wanting to buy it.
The authors obtained a similar effect using a social measure
of distance. In this case, participants
were college students and they were either giving their own opinion about a
product or predicting the opinion of the typical student. When giving their own opinion, price
primarily influenced their perception of value.
When predicting the opinion of the typical student, though, price
affected judgments of quality.
In the end, though, you probably want to consider both
quality and value when making a choice.
When you’re standing in front of the wall of blenders, you can do that
by taking your choice in stages. Start
by treating the choice as if you are picking the best blender for a
friend. That will allow you to focus
your evaluation on the quality of the products.
After you feel you understand the quality, then go back and focus on the
one you would really like to buy. That
way, you can let your focus on value happen after you have already thought
about quality.
