P is for Pricing

As we have learnt in class, price is the strongest determinant of whether we purchase a product or not. Whilst also being one of the biggest influences on our perceived value of the product.

One particular part of pricing that is interesting to me, is prestige pricing. How is it that Apple can charge a slight premium on its computers, or how can Rolex demand such a high price for a timing device. Below are a couple of commercials, that give the feel of prestige.

As you will notice, there is no mention of price. As the old adage goes if you have to ask you can’t afford it!

Both Lamborghini and Pagani have done a great job showcasting their product and showing its true class. They both use music and the mood to portray that their product is of greater value.

Some might ask what the difference is between a Zonda and a regular sportscar, in theory not much (maybe a little extra horsepower). So what is it that makes you want to spend $350,000 compared to $50,000 for a little extra performance?

Is it the satisfaction of having people turn their heads as you drive by? Or is it merely the prestige or showing up to a cocktail party in the most expensive car in the parking lot? Either way, these companies have done a great job in getting their consumers to perceive much higher value than the actual product is worth.