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The Luxury Strategy

What makes a luxury brand? In The Luxury Strategy, Jean-Noel Kapferer and Vincent Bastien tell us in great detail what distinguishes "luxury" from "premium" and the merely expensive. And, as one might expect, our emotions play a huge role in the way we perceive luxury.

By |April 8th, 2010|

Cookie Framing

Years ago, when The Tonight Show ruled late-night TV and when all the guests weren’t celebrities promoting their latest book, movie, or TV show, host Johnny Carson interviewed the Girl Scout who sold the most cookies that year. This young lady, Markita Andrews, set a cookie-sales record that has yet to be broken. What was her technique? In addition to hard work, she used a framing strategy to make her customers view the purchase as a trivial expense: […]

By |February 9th, 2010|

Pricing Lessons from Restaurants

My last Neuromarketing post, Neuro-Menus and Restaurant Psychology, talked about various things restaurant menu engineers do to maximize sales and profits. I think it’s worth calling special attention to one aspect touched on in that post: how price presentation affects sales. Not, the price itself, which of course is very important, but the way the price is displayed to the diner. […]

By |January 7th, 2010|

Neuro-Menus and Restaurant Psychology

Restaurants are great test labs for testing neuromarketing techniques. It's easy to change offerings, menus, and pricing, and one gets immediate feedback on what's working and what's not. Today, many eateries are employing sophisticated menu psychology to maximize sales and profits.

By |January 4th, 2010|

Differentiate or Die

Book Review: Differentiate or Die by Jack Trout (Second Edition)

If someone asked you what set your product or brand apart from the competition, would you answer “quality” or “customer orientation?” If your answer is “yes,” you might be in for a rude awakeing… […]

By |October 26th, 2009|

More Decoys: Compromise Marketing

Why a logical product lineup may not be the most profitable
 
When marketers plan a company’s product offerings, they usually try to do so in the most logical way possible. Several levels of product may be offered – a stripped-down, basic version, a more capable better version, and perhaps a “best” version. These would normally be priced at quite different levels, probably based in part on the relative manufacturing costs of the products. In one of my most-read posts, Decoy Marketing, I described research that showed how a seemingly irrational pricing strategy, i.e., pricing an inferior product either the same or almost the same as a better one, could boost sales of the better product by making it look like a bargain. (In that case, the inferior product is the decoy.)

Now, let’s look at a different kind of decoy: a new high-end product that, even if it sells poorly, can boost sales of the next product in the lineup. Stanford Business describes how this can work: […]

By |December 3rd, 2008|

Precise Pricing Pays Off

In my time as a catalog marketer, I almost always priced products just below the next dollar increment – a cheap item might be $9.97 rather than $10, while a more expensive item may have been $499, or even $499.99, instead of $500. My strategy was based on a couple of assumptions. First, I thought that there was probably something desirable about offering, say, a “nine-dollar-and-change” price vs. a “ten-dollar” price, i.e., even though the difference was only a few pennies, some customers would perceive the $9.97 price to offer more substantial savings. Second, I observed that big marketers like Sears, who could afford to test any number of pricing options, tended to stick with the “just below the next increment” approach. As it turns out, I was right, but for the wrong reason. New research points us toward the reasons why consumers respond better to a $499 price vs. a $500 price, and it has more to do with the apparent precision of the odd number: […]

By |April 28th, 2008|

Get More for Your House with an Odd Price

I love research findings that run counter to intuition, or are at least unexpected, and the idea that you can get more for your house if you market it with an odd price is certainly unexpected. That’s what […]

By |April 26th, 2008|

Placebos, Price, and Marketing

Hot on the heels of learning that more expensive wine tastes better, we find that more expensive placebos are more effective at controlling pain: […]

By |March 6th, 2008|

Why Expensive Wine Tastes Better

For Neuromarketing readers, it’s not big news that the perception of wine drinkers is altered by what they know about the wine (see Wine and the Spillover Effect, for example). Now, researchers at Stanford and Caltech have demonstrated that people’s brains experience more pleasure when they think they are drinking a $45 wine instead of a $5 bottle – even when it’s the same stuff. The important aspect of these findings is that people aren’t rationalizing on a survey, i.e., reporting that a wine tastes better because they know it’s a lot more expensive. Rather, they are actually experiencing a tastier wine. […]

By |January 16th, 2008|