The Australian Small Business Blog

Tuesday, May 01, 2018

Marketing Moments - Making a Buying Decision on Price

by Dr Greg Chapman

Recently there was a test with top concert violinists comparing Stradivarius violins with the best modern ones. The violinists were required to wear welder’s goggles, so it was literally a blind test. They were to decide on the basis of sound and playability, and ultimately, which violin they would prefer to take on a tour.

Surprisingly the cheap modern violins won out. (OK, not that cheap, at $30,000, but about 100 times cheaper than the average Stradivarius.) Do you think that this news will cause a crash in the price of the Stradivarius?

So what are purchasers of this legendary violin paying for? Not the features. It is the reputation and rarity. Stradivarius is not making any more violins, and the very best modern ones, while still a craft based industry, cannot be regarded as rare. Their brand names aren’t known to the public.

People are likely to pay more to hear a Stradivarius, and the violinists, likely to be paid more to play it. After all, only the very top tier violinists are allowed to play them.

For the audience, the combination of a renowned violinist and violin assures them that they will be enjoying the very finest performance that money can buy, and an experience they can recount to others (bragging rights).

When pricing your products and services, how can you position them so the features are not the focus of attention for the buyer, but that the higher value, and certainty of results is?

That is, how can you make your products and services reassuringly expensive?

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Dr Greg Chapman is the Director of Empower Business Solutions and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success and Price: How You Can Charge More Without Losing Sales.

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Dr. Greg Chapman is also the author of
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