Why Do Prices Matter to Consumers?

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Why Do Prices Matter to Consumers?

It’s always the same scene. When Apple releases a new product, especially an iPhone, a massive crowd gathers at the entrance. They’re waiting to pay more than almost a thousand dollars for a mobile device.

This scenario seems to be a deviation from the long-held belief: At the end of the day, consumers will always go for the cheaper product. It then makes you wonder, does the price still matter to buyers? Are there other factors that influence their purchase?

Price Counts to a Certain Extent

Businesses should still consider using a price-tracking tool because consumers are still sensitive and receptive to price changes. In a survey by Retail Systems Research, 49% said that they could get the same product for a lower price elsewhere. Around 41% didn’t like the fact the prices are different offline and online. More than 15% said that the value and uniqueness of the product don’t matter—it’s always the cost.

Make no mistake about it. Consumers certainly want more for the items they wish to buy these days, but they are also practical. Consider this example. Let’s say a customer looking for a pair of sneakers finds a good one online for $50. When he went shopping one day, he discovered a store carrying the same product for $40.

The price difference is $10, but for the consumer, it is enough to say the offline product has more value than the online one. After all, he gets to save money. Nevertheless, the price itself should not be the unique selling proposition (USP) of your product. This is because you will only become reactive to what your competitors will do.

Pretend that three more businesses are selling a similar product. If they decide to bring their prices down, you have no other choice but to do the same as well. What if the price drop will ultimately hurt your cash flow and profit?

Take Inspiration from Apple

iphone

Where should you base your USP then? It all boils down to the value of your product and your service. A perfect example of that will be Apple. It is a tech giant today, but it used to be non-existent in the mobile phone sector. Many years ago, the likes of Nokia and Blackberry reigned supreme.

When they released their first iPhone, there was a massive shift. What happened? Apple provided something precious and didn’t stop there. The iPhone was phenomenal because of its design. It was the first touchscreen device. Beyond that, it consolidated applications such as music and camera. When you buy this product, you can choose not to invest in an iPod or a Canon (unless you want to more sophisticated photos).

Apple also created and expanded its ecosystem. For instance, you can sync multiple Apple products such as the iPhone with iTunes. You can then use your IOS device to control an Apple TV.

That’s not all. They made after-sales support more accessible. Today, you’ll find hundreds of Apple and Mac stores that can help you out with repairs. Every iPhone purchase includes AppleCare, which is a comprehensive protection plan. It includes one year of hardware repair coverage and 90 days of free tech support.

Price does matter, but it’s often not enough. For you to compete, focus on the triumvirate: value, price, and customer service.

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