There are four factors that influence purchase decisions that are somewhat intertwined.
The first one is pretty easy right, you needs something, you go out and buy it right? A lot of the bigger blue chip companies support your needs purchases – toilet paper, food, gas, etc ( all those consumer staples companies ). Its not as simple as it sounds, because although they have the staples you NEED TO BUY they still also have a lot of competition. They spend tons of money on branding, sales, distribution r & d and fighting for shelf space to stay top of mind with consumers.
The second, WANTS BASED is a little more complicated, although needs based purchases do play on our emotions slightly, there is a big emotional factor when it comes to wants. You don’t really need the latest and greatest smartphone with the over sized screen, or the newest car model with cameras at every angle and self driving capabilities.
Than, you have PRICE and EMOTION, which can almost be considered sub-factors that fall under needs and wants when it comes to actually pulling the trigger on a purchase. The price is just so good you cant walk away ( “wow, I cant pass this deal up” ) OR the seller has painted such a good picture in your mind, that you cant walk away.
Here’s an interesting tidbit, sometimes people will spend more than they want to spend or can afford to spend on a need OR want when there is an emotional factor involved. This where intertwining comes into place with emotions coming into play at almost every level.
So lets go back to PAINTING A PICTURE, its a big factor, why? The picture you paint in the mind of potential customers will influence purchase decision and determine whether the asking price is inline with the product or service offered. That’s why you always hear things like “you get what you pay for” or ” the lowest price is not always the best. “
These are preconceived value expressions that have been embedded into consumers from their past experiences and experiences of their inner circle. They understand the price / value formula and that is why its very important to take these components into consideration when implementing a pricing strategy.
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