You go to a restaurant and decide to have a glass of pinot with your meal. You look at the wine list and haven't heard of any of the choices, so you assume the one with the highest price is the best glass. But the question remains: will you buy it?
According to new Cornell research, "A positive perception of a product based on its higher price doesn't automatically translate into a decision to buy it."
The research was conducted by Ori Heffetz, an assistant professor of economics at Cornell's Johnson Graduate School of Management, and Moses Shayo of the Hebrew University of Jerusalem.
In order to determine the extent to which price influences consumers' attitudes toward a product, the researchers conducted experiments with differently priced foods. A few of the findings:
- Contrary to conventional wisdom, participants did not clearly favor the higher-priced items.
- A higher price tag can create a favorable first impression of an unfamiliar item, but this may not be enough for a consumer to buy it.
- The researchers believe that price still has some effect on demand, but that the effects are too small to be significant.
This study seems fairly indicative of current trends. After all, well-known designers collaborate with budget-conscious stores like Target and H&M, and people seeking gourmet snacks are just as likely to head to Trader Joe's than to a high-end wine and cheese shop. It seems that consumers no longer automatically think quality needs to come with a high price tag; either that or in these recession-minded times, quality simply isn't the highest priority.
Wine bottles image courtesy of Flickr user Ed Yourdon, CC 2.0