Marketing, Psychology and Debt
Now I hope I haven’t scared you off with the title of this post and think that you are about to read a excerpt from a university lecture. Instead this is a post that will tie together marketing, psychology and debt all wrapped up in an interesting and useful package. I recently read the novel Contagious: Why Things Catch On with the original intention of adding to my marketing knowledge (since I’m currently studying marketing at university) and managed to stumble upon some information that basically proves that yes, marketing and the way products are priced might just be tricking us into spending more.
$100 off or 10% off, You Choose
Something really interesting that came up while I was reading through Contagious was the following;
- Products with a regular price of about $100 or less are more appealing to consumers on sale when the sale is promoted as $50 off, or $20
- Products with a regular price over $100 are much more appealing to consumers when the sale is promoted using 10% off for example
So basically you are more likely to purchase a $100 watch if it’s $20 off then if it were 20%, yet it’s the same sale. Think about that the next time a product is on sale, is the 5% off that iPad really that much of a deal?
Large Purchases vs Small
Another crazy thing to think about.
Are you more likely to drive 20 minutes to a store to do the following;
- Buy a alarm clock regular $35.99 NOW $15.99 or;
- Buy a flat screen TV regular price $649.99 NOW $629.99
Do you know which most people picked?
Yup..the alarm clock. The reason=Saving $20 on a TV seems a lot less significant than saving $20 off the alarm clock. But oh wait, your still saving $20 but it seems less significant when its a more expensive item. Crazy right?
So Why Am I Telling You This
Well to be honest, some of these bizarre marketing and psychological factors may be causing you or people around you to spend more than you should. An extra $20 saved on a flat screen TV means you could have purchased the alarm clock too..when you think about it that way I bet you wouldn’t feel as cheap about trying to save those $20’s after calculating that great deal out.
Here’s the lesson I hope to impart on all of you students out there. Every dollar counts. Whenever you can save money, do it no matter how insignificant it seems. That extra $30 you save on your laptop computer purchase means you can buy a protective case for it to prevent it from getting damaged without spending more after you already dished out a ton of $’s on your laptop. Try to not let those nasty marketers out there (yah I know I’m going to be one of those soon) trick you into buying more than you need. Those are your dollars, be cheap, when you’re a student it’s also a lot more socially acceptable ..embrace it.
Oh yah you can also snatch up a copy of Contagious below…it’s a really great read.