The Price of Products Guides Consumer Expectations

Whilst almost every consumer would agree that price is important, most are unaware of how it is closely aligned with emotions and our overall perception of products. Most will think of price as something that they consciously consider but, in fact, it is how it influences consumers subconsciously that often is the deciding factor in whether they purchase something.

Product Expectations

Price also guides people’s expectations of products. This was evident when people were told to taste a range of differently priced wines and state how pleasant the drink was. However, some of the wines were in fact the same wine. Interestingly, it was found that simply increasing the price of a product has the capacity to also increase perceived pleasantness. Whilst this was using wine, a product where quality is commonly linked to an increase in price, there is no reason to also assume that this can be extrapolated onto other products. Since there are also many other products whereby a higher price is associated with better quality or status (such as a Gucci handbag compared to one from the local supermarket or an iPhone compared to a less familiar brand) there is no reason to believe that the findings are not equally applicable to other products. Equally, consumers are also often quick to judge very cheap products as inferior, thus confirming the influence of price on expectations.

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Getting the Price Right

Whilst it may seem like a good idea to increase the price of a product, this is not always the case, as a price that is higher than a comparable product can result in a negative perception. Often this is to do with "fairness," an aspect of price that is of particular interest to consumers. When shoppers see a product, they like with a price they perceive as being "fair" they experience a sense of satisfaction. Such satisfaction is associated with recruitment of a part of the brain that is called the nucleus accumbens. The nucleus accumbens is a structure that is linked with the anticipation of pleasure.

However, if a price is perceived to be "unfair," a part of the brain called the insula is activated. This is the part of the brain that registers pain. Thus, it seems that when consumers perceive a price as being unfair, they are experiencing emotions linked to feeling "tricked" by the seller. Unsurprisingly, experiencing negative emotions can lead the consumer to walk away from a potential purchase.

Price Intertwined With Emotions

The relationship between price and emotion can be instrumental in what people purchase as well as why they purchase it, and this is closely connected to whether a price is fair. You may well assume that whether a price is deemed to be fair is mainly a cognitively based comparison to similar products or the same one sold by another retailer. However, this is a simplistic view that holds little real-life resemblance.

Increasingly, research findings are showing that our emotions are instrumental in determining if a price is fair as well as the subsequent shopping behaviours. If consumers are experiencing negative emotions, the price is perceived more negatively. However, if the consumer is experiencing positive emotions, as much as a 20 percent price increase can be "absorbed" by the emotions experienced. This means that consumers should be cautious when "feeling happy" as they may perceive prices as better value for the money than they really are.

When prices are perceived as unfair, it does not just affect the likelihood of purchase but also other negative behaviours that may harm the seller (e.g., complaints and negative word of mouth). The stronger the unfairness is perceived to be, the stronger the engagement is in negative behaviours toward the seller.

The fact that price is closely aligned with our emotions may help to regulate (to some extent) our purchasing behaviours, thus almost acting as a subconscious protection, especially in cases whereby our insula is activated. However, as consumers also use it as a guide to determine quality, it can equally "misguide" them to purchase an item that perhaps is not as great as they may believe that it is. When emotions are involved, most consumers would not realise that they are in fact making decisions based on their responses to prices.