Imagine this is a hot day and you are at the beach. He only has water to drink, and at the last minute he is desirous of drinking a beer. A friend will leave the beach and offer to bring you a beer from (a) Luxury Hotel or (b) local grocery store.
Your friend asks how much you would be willing to pay for this beer to know if you have your purchase authorization (you will only buy if the price is less than the amount you give it). In the questionnaire performed only one of the options appears and the idea of the study is to perceive the prices assigned in each context.
The price varied with the context
In the above study we are talking about the possibility of buying a beer that can be considered a commodity to the extent that taking rare exceptions, in a thirst and heat situation we do not usually be weird with the brands (right?). Thus, the only differentiating factor becomes the price and what was concluded was that the reference price was:
- € 2.65 in the Hotel
- € 1.50 in the local grocery store
In practice, we find that there is a difference that is not insignificant (it is more than 76%) and that is due to the context. We are scheduled to pay more at a hotel than at a grocery store which changes the price we are willing to pay. Does it make sense?
Two types of utility
Good finance speaks to us of two types of utility that we must take into account and that in practice our consumption behavior:
- Acquisition – Compares the price paid with the value of the product
- Transaction – Compare the price paid with the product reference value (the price we expect to pay for this product).
The usefulness of the transaction makes us consume things we don’t need
Have you thought what are the promotions for? Or the products featured on certain commercial surfaces? These marketing maneuvers serve to draw attention exactly to the usefulness of the transaction.
We are tempted to think that there is a big deal there and that we would be crazy if we did not take advantage of it. So we spend money simply to take advantage of a promotion even though we often do not need that product. Are you familiar with this situation? Has it happened to you yet?
We should focus on the utility of the acquisition
Talking is easy but to make better use of our money we should buy the price we are willing to pay with the value of the product. Of course, if we are blind we can “die to thirst” if we are on the beach and there is on the grocery store site. We have to be reasonable or rational. And this implies that we are rigorous in determining the value of products. For example:
- Are branded products in supermarkets better and justify the price difference for white label products?
- Does it make sense to buy branded baby shoes for 6 months?
- Will not it make more sense to buy used products?
- Why not opt for less well known car brands?
The answer to these questions can help us maximize the amount we take out of our salary. We are not completely rational economic animals (fortunately). But we have to use rationality to overcome marketing strategies that appeal to feeling and irrationality. Then comes the waste and the bump in our family budgets.