"Mountainview has a real interest in Science. Not because they like being academic, but because they care about how the world really works."
- Professor Byron Sharp,
Ehrenberg Bass Institute, Australia
Anchoring and Adjustment
How would you make a Mercedes SLK seem like a bargain?
Just like shades of light, people judge a price relative to those around it. They anchor to the first price they see and fail to adjust, and so they judge subsequent prices according to how they compare to that first one.
Even though they are the same, the £8 price will be perceived as lower when the customer has first anchored to £40.
So if you want to make the Mercedes seem like a bargain, you put it next to a Ferrari, a Rolls Royce or a Lamborghini! And it works both ways. Try to imagine what happens when you put your brand next to a cheaper alternative.
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