High prices can actually motivate consumers to buy. Why is this?
Let me explain this with a true story. A few years ago, a friend of mine who owned a jewellery store called me to describe a curious set of events. At her store in Arizona she had a fine set of Native Indian turquoise jewellery that was selling slowly, which surprised her since the jewellery represented good value for the price. After trying a variety of options -- moving the jewellery to a more central area of the store, asking her sales people to bring attention to the pieces -- she scribbled a note to her head sales person just before leaving for an out-of-town trip. The note said, “Change the price of everything in this showcase to times 1/2.” When she returned from her trip, she was not surprised to learn that all the items were gone; but she was shocked to learn that, because her sales person had misread the note as saying “times two” rather than “one half” the price, the price had doubled, and every item had sold.
[This article has been reprinted, with permission, from Rotman Management, the magazine of the University of Toronto's Rotman School of Management]
This is a great article and the point being made about ethical influence is spot on, but the example of the Hare Krishna movement is a bit misinformed. As the author points out, the aggressive marketing techniques of some (not all) Krishna devotees at airports did in fact leave many people feeling exploited. However, it is inaccurate to connect this with ISKCON's filing for Chapter 11 Bankruptcy in America a few years ago; this was done in order to pay a settlement on a court case and has nothing to do with the fund raising methodology being discussed. The Hare Krishna movement -- having learned precisely the same kinds of lessons being written about here --was able to modify its outreach and fund raising techniques and is still very much alive and well today.
on Oct 25, 2009