Would you pay a premium for a product of perceived higher value? Would your parents? Would your grand-parents? Do seemingly environmentally or socially responsible purchases make you feel warm and fuzzy inside?
Over the years consumer behaviour has shifted such that the consumer is influenced by the promises of perceived value. From branding to the promise of social responsibility, the consumer now seems more willing to pay more or accept a lower quality, because it feels right. Deep down we all know these gimmicks don’t cost the manufacturer anything, where an increase in input costs exists, they are immediately passed onto the consumer anyway. When did this perceived and intangible value become more important than tangible value like price, quality and accessibility?
Let’s start with an example, the perceived value of a brand.
While getting my haircut this week I read a “GQ” magazine which contained photographs of a model wearing various clothing, the item and the price were listed in the corner of the page. I was dumfounded to learn that a plain, cotton T-shirt was priced at almost $200 dollars. A comparable shirt from most department stores retails at between $20-$50. Both items provide the same tangible value, a comfortable and colourful item of clothing.
“Would anyone buy this? What would they get out of it?” I thought to myself. The lure is in the brand-name, the perceived quality and perceived status that ownership of such items brings. The perceived benefit is just too strong.Unfortunately it still only takes 1 brush past a frayed fence to turn both shirts into the same $2 worth of cotton cloth.
Another example, the rise of so-called non-genetically modified foods.
Years of research and scientific advancement has lead to the creation of genetically superior crops. Consumers have benefited from the improved quality, reliability and price. But now some marketers have managed to sell people on the perceived value of what is ultimately a higher priced and lower quality product, the often talked about non-GM food. In this case they have essentially slandered the alternative to create a negative perception.
The consumer gets no tangible material benefit from buying non-GM food, in fact there is a marked loss from buying this product. Yet they flock to this product, not from a strong perceived benefit but because of the demonization of the alternative.
The list goes on and on, here are few I’ve noticed just this past week:
- The promise that a small percentage of my sale would be donated to a charitable foundation.
- The advertisement that a products packaging is fully recyclable.
- The advisement that the coffee I was about to purchase was of the fair trade variety.
- The proposition that I should purchase milk only of the A2 variety.
- The offer to offset the carbon created by my trip for a nominal fee.
Have consumers always behaved in such a manner as to be enticed by these trivialities or is this behaviour of a modern consumer? In this age consumers are faced by unprecedented choice, and where an apple really is just an apple, they are still forced to choose.
“How has this happened!?”, you may ask. You may say that your grandparents had enough to worry about trying to crawl out of the mud, intangible value was the least of their worries.
The truth is that through the careful training of the consumer, they have been taught to look out for intangible and superfluous aspects of products before making purchases. They have been told the benefits of some aspects in the hope they will look out for them. Equally they have been taught the negatives of some alternatives so they will preclude them from their choices. They even do it at the cost of important and tangible value.
Ultimately, consumer behaviour has been shifted so that they look out for certain properties of a product that have a perceived value before making purchasing decisions. Many of these properties seem to be related to perceived health, environmental and social responsibility which did not enter in the product to purchase equation in the past.
Ultimately, marketers must adapt to this trend in consumer behaviour or else be beaten in the market by competitors offering what are essentially intangible and often free to offer benefits, especially when they can charge the consumer more.