Why do people pay more for a service/product?

snubbleste

Why do people pay more for a service or product?

Prepay electricity is one. Prepay is minimum ~€130 more expensive annually than traditional payment methods. Prepay users keep insisting it's cheaper even when I point the inverse. Why spend an extra €130 for a service with no added benefit?

Groceries is another. Generic products these days are as good if not better than the branded version. Whilst I acknowledge there is a taste factor - is it really worth the premium?
Branded bottled water, aaarggh

thattequilagirl

snubbleste wrote: »

Why do people pay more for a service or product?

Prepay electricity is one. Prepay is minimum ~€130 more expensive annually than traditional payment methods. Prepay users keep insisting it's cheaper even when I point the inverse. Why spend an extra €130 for a service with no added benefit?

Groceries is another. Generic products these days are as good if not better than the branded version. Whilst I acknowledge there is a taste factor - is it really worth the premium?
Branded bottled water, aaarggh

Advertising, brand reputation, ego, discretionary income, customer service levels, quality etc all have a part to play.

luftmensch

thattequilagirl wrote: »

Advertising, brand reputation, ego, discretionary income, customer service levels, quality etc all have a part to play.

You forgot stupidity.

desbrook

The answer to your question is it makes them feel better i.e. - by buying the branded or more exensive product it then symbolises the fact they can afford more. This reinforces their belief that they are superior. Simples !!

sKeith

Apple lightning Charger cables. 25 euro. Apple 5W usb adapter 25 euro. So 50 euro to get spare charging equipment.

donegal.

apple

thattequilagirl

luftmensch wrote: »

You forgot stupidity.

It's stupid to pay more if two products are exactly the same, but that's rarely the case.

Convenience is also a factor. Spar is way more expensive than Tesco but I'll pay it because it's just downstairs.

thelad95

Because so many people are a marketing departments wet dream.

Aint Eazy Being Cheezy

luftmensch wrote: »

You forgot stupidity.

It's not stupid if you're paying a premium to get better service.

PM me nudes

snubbleste wrote: »

Why do people pay more for a service or product?


Groceries is another. Generic products these days are as good if not better than the branded version. Whilst I acknowledge there is a taste factor - is it really worth the premium?
Branded bottled water, aaarggh

There's your answer.

Shint0

We Irish would rather pay more for something than haggle. Some cultures would laugh at you if you didn't haggle. Fool and their money etc.

stoplooklisten

to tell the neighbours

Eugene Norman

Sometimes brands are not much better, sometimes they are a guarantee of quality.

For cheaper items I wouldn't bother.

FionnK86

Ahh nothing beats branded Coca Cola. Generally, branded products are popular for a reason. But as the market becomes more saturated with replicas or knock-offs there a bound to be a few products that are nicer and cheaper. For example, a new Michael Kors bag is quite well made, and usually comes with a warranty for return. But if you get a cheap Penney's one you're usually back buying another within the year. If you're lucky you might get a Penney's bag that lasts and you can be happy in the fact you've spent very little for a bag you like.

sbsquarepants

thattequilagirl wrote: »

It's stupid to pay more if two products are exactly the same, but that's rarely the case.

Convenience is also a factor. Spar is way more expensive than Tesco but I'll pay it because it's just downstairs.

Lay off that tequila - spar is all the way across the road.:mad:

maudgonner

PM me nudes wrote: »

There's your answer.

Only if the taste factor outweighs the price difference though.

osarusan

Isn't one selling point of pre-pay electricity that it raises awareness of electricity usage and can help you to cut down on usage?

As for the rest, it's all a matter of taste and of course the people who pay more for certain items are sure that for that particular item, the premium is worth it.

For me, instant coffee is one that really does depend on the brand, and some taste waaaaaay better than others. Others might think they all taste the same though.

PM me nudes

maudgonner wrote: »

Only if the taste factor outweighs the price difference though.

Yes, I agree

Capt'n Midnight

Aint Eazy Being Cheezy wrote: »

It's not stupid if you're paying a premium to get better service.

It's stupid if you aren't getting a better service.

Far too many brands have cashed it.


How many of these TV / Audio brands do you recognise ?

Acoustic Solutions
Akai
Alba
Anderson
Atec
Blaupunk
Bush
Celcus
Cello
Daewoo
Digihome
Digilogik
Dual
Durabrand
Electra
Emerson
Feguson
Finlux
Goodmans
Graetz
Grundig
Hisense
Hitachi
Horizon
Isis
Jmb
Jvc
Kendo
lexsis
Linsar
Lodos
Logik
Luxor
Matsui
Medion
Mikomi
Mitsubishi
Murphy
Onn
Orion
Pacific
Panasonic (low end models)
Pentis
Proton
Phillips
Polaroid
Proline
Qiivive
Regal
Sanyo
Seg
Seiki
Selectline
Servis
Sharp
Strong
Teac
Technika
Technonsinic
Techwood
Teco
Telefuncen
Teletech
Telsa
Tevion
Thomson
Tiny
Toshiba (Only make top range ones themselves)
Universum
Vestel
Vestfrost
Videoton
Voxson
Walker
Waltham
Watson
Westwood
Wharfdale
Xenius
Laurus
Nordmende

All rebadged Vestel or UMC at some point, and there are lots of other OEM's out there too.


I still haven't forgiven Sony for trashing the Aiwa brand.

12Phase

Prepay electricity I would have assumed is for people who have serious issues managing their finances or where landlords don't trust tenants with billed power.

You can control your consumption by intermittently reading any meter!

PLL

It's just psychological pricing, people are willing to pay it because it gives a perception of its worth. E.g. More expensive dishwasher tablets will clean better.

Marketers just exploit this product perception in people.

prinzeugen

maudgonner wrote: »

Only if the taste factor outweighs the price difference though.

As was proved on a recent Channel 4 documentary, stuff made for, say M&S and Lidl/Aldi in the same factory is not the same.

The cheap stuff has tons of flavorings added to hide the fact that it would taste 5h1t otherwise as the basic ingredients are of a poor quality and hence cheaper.

It should be on 4OD still.. Well worth a watch.

The Golden Miller

prinzeugen wrote: »

As was proved on a recent Channel 4 documentary, stuff made for, say M&S and Lidl/Aldi in the same factory is not the same.

The cheap stuff has tons of flavorings added to hide the fact that it would taste 5h1t otherwise as the basic ingredients are of a poor quality and hence cheaper.

It should be on 4OD still.. Well worth a watch.

Well I know Dunnes crisps are the exact same as Tayto with one less flavoring. Used to work in Largo years back. I'd say the basic ingredients being poor quality is more in relation to bigger countries and companies and not as prevalent in Ireland, whereas here it's normally the same product minus one unnoticeable flavoring. Chef making Dunnes ketchup is another example. Effectively the exact same

Generally I'd pay a premium for Sony products, but much of their buggy software on stuff like Sonicstage for the Walkman and their Vaio laptops let them down badly and cost them major market share in the 00's, compared to the more user friendly Apple. Although, they seem to have sorted that out so I'd once again go for Sony, as their prices are quite competitive (at least on par with their rivals), while generally being better in terms of specs. All you gotta do is compare a high end Xperia to the Galaxy or iPhone. Quite a big difference

ScumLord

Sometimes, if you do your research as a consumer, the more expensive brand is also much better and the company has a much better customer service as well.


Building my PC would be an example. The first one I built I bought a cheap case. It looked good and did the job perfectly well as far as I knew. The next time I was making a PC I spent something like 3 times on the new case as I did on the old case. The difference was pretty major. It was designed with the person putting in the parts in mind. No need to use screws, easy access to everything, easy to remove air filters and it's still in perfect condition today, ten years later.

Another example is switching my mobile to Eircom (Eir), the monthly cost were cheaper but their customer service is non existant. I was handed a broken phone on day one and nearly 18 months I still haven't gotten any satisfactory support. My entire time spent with the company my "smart phone" has been no better than a pager from the 90s.

Guarantees and standards are another thing you could be paying for. Which all seem like overkill until the product breaks and you need support or end up injured.

I avoid cheap stuff now, the problem is there's a lot of cheap stuff masquerading as high end these days. At this stage it's hard to trust any brand. Sony used to mean quality, I wouldn't rate it at all anymore. But it's very easy to research things these days.

Minderbinder

Shint0 wrote: »

We Irish would rather pay more for something than haggle. Some cultures would laugh at you if you didn't haggle.

Raging_Ninja

Some items are desired simply because they are expensive. These are called Veblen goods in economics, the more expensive they are, the higher demand is for them as status symbols.

An example would be Rolex watches or lamborghinis.

Cupcake_Crisis

Convenience. I'll pay more for a pint of milk in the shop across the road before driving 10 minutes to Aldi or Lidl for a cheaper one.

But when it comes to clothes or shoes I'm a notorious bargain hunter.

smash

snubbleste wrote: »

Prepay electricity is one. Prepay is minimum ~€130 more expensive annually than traditional payment methods. Prepay users keep insisting it's cheaper even when I point the inverse. Why spend an extra €130 for a service with no added benefit?

I'm still yet to see the downside of this. I got a meter installed when I had planned on renting out my house. In the end I decided against renting it out but I kept the meter there in case I did it in future. It costs €20 a week which works out around €35 cheaper than my previous bi monthly bill. I could probably make if cost €15 a week if I worked on conservation more.

ScumLord

Raging_Ninja wrote: »

Some items are desired simply because they are expensive. These are called Veblen goods in economics, the more expensive they are, the higher demand is for them as status symbols.

An example would be Rolex watches or lamborghinis.

That's not really true though. A Rolex or Lamborgini also costs a lot more to manufacture. It's not like your average Lamborghini costs the same to manufacture as your average Ford. Rolex watches are often personalised so while the mechanics of the watch may be made on a production line, the assembly is probably done by hand, which makes it expensive.

The production runs are also a fraction of your average consumer product. ford would probably sell more Mondeos a month than Lamborgini would sell over the lifetime of the model. That's not just down to demand, The Lambo takes longer, is made from more time consuming parts (carbon fiber tubs), probably needs more calibration, the list of why a Lambo is more expensive is extensive.

PARlance

snubbleste wrote: »

Prepay electricity is one. Prepay is minimum ~€130 more expensive annually than traditional payment methods. Prepay users keep insisting it's cheaper even when I point the inverse. Why spend an extra €130 for a service with no added benefit?

It may not be cheaper but they may end up spending less due to awareness / budgeting etc.

It's similar to mobile phone top up vs bill pay.

Monthly billing and post payment take the pain out of payment and consumption generally rises as a result.

duffman3833

the one things that i just cant understand is when people buy is branded toilet roll. Why spend more to wipe your rear. baffles me tbh

snubbleste

snubbleste wrote: »

Why do people pay more for a service or product?

There are whole textbooks on the psychology of why people - and how to get people - to pay more for an alternative that is in nearly every way identical. From Brand Familiarity - to ego stroking - to Brand Confidence and much much more.

There is a lot of manipulation in the advertising and marketing world and we are really amenable to it.

I remember a Derren Brown sketch where he asked some advertising guys to design a poster for his pretend new product. And he "predicted" pretty much exactly what they would produce. Mainly by using their own tactics and manipulating them in the week leading up to their producing the poster.

But that said - depending on the product and the person - there are _sometimes_ genuine reasons to pay more. Where products can be shown to be more ethically produced or sourced for example - I would pay more. Where I have read the ingredients and seen that the cheaper product uses a cheaper substitute - I would pay more.

But If I was buying baked beans or dried pasta off the shelf however - I would probably just grab the cheapest one there and not fall for the years of marketing that Heinz have used to make me feel a homely and safe fuzzy feeling every time I see their logo so as to make me reach for their jar.

ohnonotgmail

duffman3833 wrote: »

the one things that i just cant understand is when people buy is branded toilet roll. Why spend more to wipe your rear. baffles me tbh

cos the cheap stuff is like using sandpaper.

Capt'n Midnight

ScumLord wrote: »

the problem is there's a lot of cheap stuff masquerading as high end these days. At this stage it's hard to trust any brand. Sony used to mean quality, I wouldn't rate it at all anymore. But it's very easy to research things these days.

Petty much spot on.

Too many brands have sold out.

Whole industries have been hit in the race to the bottom. Once upon a time
A scientist steals a secret formula for an electrical product from his Japanese employer and takes it to China. Then it is stolen again and turns up in Taiwan. But something goes wrong - and thousands, perhaps millions, of computers and electrical goods in the West begin to burn out or explode.

It cost alone Dell $420 Million dollars. And HP, Apple , and pretty much all the low end monitors and TV's and power supplies from late 90's are likely to be affected.

The big issue is that the affected companies didn't pick up this in quality control, then tried to hide it and then allowed it continue for far too long. This issue should have been fixed in 2002 when it was public knowledge but they continued to use the faulty parts for years and years.

Sony had a TV recall a few years back.

Look at motor cars. Tens of millions of vehicle recalls for safety reasons , air bags, tyres. Look at how many cheated on emissions tests.

Then there is the whole security question. Smart TV's and Smart cars generally don't have any security worth talking about.

snubbleste

smash wrote: »

I'm still yet to see the downside of this. I got a meter installed when I had planned on renting out my house. In the end I decided against renting it out but I kept the meter there in case I did it in future. It costs €20 a week which works out around €35 cheaper than my previous bi monthly bill. I could probably make if cost €15 a week if I worked on conservation more.

Do a comparison http://www.bonkers.ie/compare-gas-electricity-prices/electricity/

Capt'n Midnight

Cupcake_Crisis wrote: »

Convenience. I'll pay more for a pint of milk in the shop across the road before driving 10 minutes to Aldi or Lidl for a cheaper one.

10 minutes each way adds up to over €3 at the minimum wage not counting fuel costs

ToddyDoody

snubbleste wrote: »

Groceries is another. Generic products these days are as good if not better than the branded version. Whilst I acknowledge there is a taste factor - is it really worth the premium?
Branded bottled water, aaarggh

I buy low fat yoghurt on special that are branded because the non-branded ones are usually ****e + less variety. Ditto soups. Same with shampoos, shower gel, razers, washin up liquid, cordial.

Generic deodorant, shaving foam, sweetcorn, microwaveable rice, pasta, pasta sauce, hand wash, juices are decent.

ScumLord

I think the problem with mass produced products is about to be turned on it's head by new automation technologies and the likes of like 3D printing.

When you do get your hands on quality products the difference is obvious. The longer you spend with a quality product the more you appreciate them too. There is a growing small scale industry for all sorts of things were people have got sick of the mainstream crap and are willing to pay big money for something that is excellent quality and long lasting. It's a bit niche at the moment but the likes of cheaper CNC machines have allowed a lot of people to open up a small manufacturing business with enough clients to keep it ticking over. Some of them burst through into the mainstream and almost instantly lose their way.

I think we'll see more of these types of businesses popping up in the future seeing the latest round of 3D printers. What they're capable of is nuts. Look at this thing.

I think in 20 years time we could have a market poluted with one off products made slightly more expensive than mass produced stuff. It could force a rapid change in the scale of manufacturing businesses.