Down the road, at the age of six around, I was walking to purchase a pencil to be used in my school. I went to a shop and asked shopkeeper ‘How much this pencil price’? He said 1.5. I thought ‘usually that pencil costs more than he is asking for. That may be some copy of the original’. I moved to another street, bought that same pencil for 1.75. While coming back to home, that old guy called me after seeing that pencil in my hand; asked ‘How much did you pay for it’? I said ‘1.75’. He asked ‘Why didn’t you buy from me while I was selling at low cost?’. I was speechless and stunned, had no answer. Period.
In fact, this is how the psychology of human minds behave and social perceptions work. This is how they modify our decisions. Society thinks expensive equals to quality. They purchase expensive items from luxury shops that have very high rental expenses and more than enough per month overhead expenses to run their business. Pricing is an illusion. In fact, pricing builds the brand.
Now change your perspective to 180 degrees, wear a businessmen shoes and think how can you implement that strategy into the business you are in. What inexpensive stuff can you sell with 1000% profit inside an awesome showcase, having a high-intensity light on it?
Brands use high pricing to make you feel you are privileged, previous, and belong to the upper lavish class. You purchase from them. They actually win, you feel a win.
Come out of your apartment. Have a walk around the streets; watch shops selling multiple consumer items and see how are they implementing the same strategy of ‘expensive equals to quality’.
In a big mall, at an event, this year. I was walking around with some of my friends while I saw a SELL inside a shoe store. Where discounted prices were written on the backside of shoes with an electronic printed ‘discounted prices’ sticker on them. I was browsing one by one when I shocked by seeing the price of shoes with 50% discount and discounted price 1200 written on that. As per my calculations. Their original price should be 2400 then. Unfortunately, one of that brand employee had forgotten to remove original price from that specific shoe.
Amazingly, that was 1400 instead of 2400.