We are wired in such a way that our evaluation of facts and events always has a contextual color. In other words, whether we deem an event good or catastrophic depends on our perception. For example, if we lived in a car, an old one-room apartment would seem like a blessing and inspire us to set it up. But if you lived in a beautiful multi-room apartment and were forced to move to a run-down studio, it would be a catastrophe. Yet, the apartment is the same!
Spending 5 hours in an airport on a layover isn’t the most pleasant experience, but in a business lounge with food, drinks, and plenty of outlets near comfortable sofas, it’s quite pleasant. And the airport and the time spent there are the same!
The concept of price-quality is great because it includes an important and significant addition—the perceived quality and relative price. We are wired to understand everything through comparison. Rory Sutherland (Ogilvy) gave a great example about perceived quality. Six billion dollars were spent to shorten the travel time from London to Paris by 1.5 hours. And he asks, “Why? Who cares about 1.5 hours if you install great wifi on the train so people can calmly do their (including work) tasks? And this would cost a fraction of that amount!” “And if you hire top models to periodically walk through and offer champagne during the trip, people will ask for the train to go slower! And that would cost a fraction of those expenses!” (I really like him, and he inspires me to think about these things.) So his point is: in marketing, the alternative to one good decision isn’t a bad or wrong decision, but another good decision!
Think about the framework within which the consumer seeks comparison. This dramatically alters the perception of an offer. Sometimes, providing consumers with these frameworks can greatly simplify a marketer’s life and save budgets.
