Recent research suggests that by changing the way we frame the price of a product in relation to its features (and vice versa), we can help consumers choose products that they will be more satisfied with in the long run.
Lee & Zhao (2014) The Effect of Price on Preference Consistency Over Time. Journal of Consumer Research.
In a nutshell, it’s all based on the fact that our preferences for products can change over time, resulting in what’s called ‘buyer’s remorse’. Research (Liberman and Trope 1998) suggests that when we require a product for more immediate needs, we opt for one that’s highly-convenient and simple, but when it’s required for the distant future, we tend to choose products high in functionality. However, this means that when we buy that simpler product now, we later experience a desire for one that’s more fully-featured, which causes purchase regret and dissatisfaction.
Fundamentally, this is all because we tend to think that greater functionality means greater value (Yeung and Soman 2007). Also, price prompts us to think about a product’s value and about whether a product is “money’s worth” (Karmakar, 2010).
One of the JCR studies is a great example of this. Here, students were asked to obtain a photo-editing software to complete an assignment that was due either in a week, or in three months. Students were asked to choose between software that was either feature-rich and complicated (Photoshop) or simpler and quicker to get started with (e.g. iPhoto). And some were told they would be given the product for free, while the rest were told they’d need to stump up the cash. Curiously, for those students for whom the products were free, they overwhelmingly chose the ‘convenient’ option. However when the price was added, they preferred the complex software, even if their submission was only a week away! What madness! Why??
Even more crazy was that for those who had to pay, some were told both products cost $10, while others were told they cost $200. However, despite this massive variation in price, it didn’t affect the results, so the bias kicks in even for a price as low as $10.
Therefore, marketers can use price to influence consumers to choose functional products that are required to be used in the near future. This can make consumer desire consistent over time and increase satisfaction with the purchase.
Interestingly, one of the follow-up studies in this paper found that when participants are made to believe that price is an indicator of a product’s ease of use (as opposed to its level of functionality), they tended to choose the simpler, easier product.
All of these studies show us that consumers’ belief in what brings them value may be integral to product sales.
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