The value of an item is often in the eye of the beholder – or the company marketing it. Take lobster, for example. In the 17th century, lobster was a food served to lowly prisoners and servants and only became a luxurious, exotic dish after a rebrand in the late 1900s. We look at how the value of a product is created and perceived.
It will be a shock to some that lobster was once so abundant that it was eaten by the poor and even used as cat food.
But an effective and subtle marketing strategy can change everything.
Once lobster was touted as an “exotic dish” by enterprising railway companies and served on trains, it began a journey towards becoming a high-class dish.
Now days, lobster is a hot commodity and is usually the most expensive item on the menu.
By emphasising how a product or service is provided, like serving lobster in a fine dining carriage far away from the ocean, businesses can change the perceived value of the product through its story.
This also occurred with diamonds. Before 1870, diamonds were very rare, but then diamond pipes in South Africa were discovered.
Some were worried their value would decrease, so a clever cartel called De Beers took control of the influx of diamonds and created the perception that they were still rare.
The cartel also paid movie producers to have scenes where a diamond was featured, such as a man gifting one to a woman.
This led to Marilyn Monroe’s ‘diamonds are a girl’s best friend’ performance.
This, paired with an ad campaign declaring that ‘a diamond is forever’, created huge exposure and demand for the product.
As of last year, 75 percent of American brides last year wore a diamond engagement ring at an average of US$4000.
Going against the grain
Ancient grains aren’t a newly discovered commodity, as people have eaten them for many centuries and yet sales are surging for them.
Consumers associate the ancient grains with health and simplicity, which is a great attribute to be linked to, as being health-conscious is increasingly trendy.
An article published in USA Today polled 30,000 consumers and found younger people are more concerned about everything from food ingredients to organic foods than previous generations.
Almost half (41 percent) of Generation Z, which is individuals under 20 years old, would be willing to pay more for healthier products.
A third (32 percent) of Millennials were the same, while only 21 percent of baby boomers would pay more.
In terms of ancient grains, nutrtionist Cynthia Harriman says if they’re mentioned on a product label, you can increase the price by 50 to 300 percent.
An example of this is the New Zealand made ‘Chia’ drink, which is made up of the ancient grain, chia seeds.
It uses an interesting backstory to market its products as a ‘real food’ endurance sports drink.
According to the company’s website, chia seeds helped the Tarahumara Indians of Northern and Central Mexico in their long distance runs through the desert.
It retails for around $6 a pop, so it isn’t in the low-ball price range.
It is now stocked in more than 400 cafés and speciality food stores nationwide, with Chia orders having doubled over the past six months.
About 10,000 bottles of the jelly-like drink are produced per week.
You’re drinking what you’re thinking
According to Vouchercloud’s infographic, the top reasons why customers pay more for the same products are:
- The products are easier to buy
- The product arrives more quickly
- The product brings the buyer prestige
- Lower cost of ownership
- Friendly customer service
Despite the quality of the product itself, consumers will rate products as higher quality if they come from a company they’ve perceived to have higher brand value.
Research has also found that “charm prices” increase sales by about 24 percent when compared to nearby, rounded prices.
Some sense can be derived from these customer choices and perceptions, but a lot of the time, they can’t even be explained by the customers themselves.
Image Centre Group executive director and New Zealand ad guru Mike Hutcheson says, “You’re drinking what you’re thinking”, as often this is the case, even if it’s subconsciously.
A study involving wines actually proved this was true, as it found more German wine than French wine was bought when German music was played in store.
When the customers were asked why they chose the German wine over the French wine, none of them mentioned the music as a deciding factor.
Infographics provided by Vouchercloud