A chance discussion with my dad last week got me thinking. We were taking a stroll and having a conversation. Though it was early evening, the humidity was still high and we were feeling worn out within minutes. So I suggested we have tender coconut. When the vendor told me it would be 25 Rs/- I nonchalantly paid the price for two and walked up to my dad and offered him. When my dad heard the price I had paid – he was quite livid. “25 Rs/- for a tender coconut? We are not asking for a whole tree” he said characteristically. And I tried to calm him down saying “Appa, it is only 25 Rs/-“.
This however got me thinking. Paying 25 rupees for a tender coconut in South India is definitely not low price. But in today’s circumstances 25 Rs is a low ticket price for many of us. It is very important to understand there is a huge difference between the two. And our failure to understand the difference and the connect between the terms value, cost and price often allows us to be irrational consumers
You will understand this when you see yourself:
- Pick things off the supermarket shelf which you know internally you may never use only because it has a low price attraction.
- Constantly get attracted to goods which you know are of low quality, telling yourself even if it works ½ its promised lifetime, you have a deal for yourself
- Reaching out for a bundled sales, knowing the add-on is not of much use to you but you still go ahead only because you can have much more features paying just a little more – features that you will never use.
- Pick up larger quantities that create issues in storing, preserving and subsequently using – only because the larger volume comes with a comparatively lower price than a smaller volume which makes it look premium
- Pick up in your every week shopping smaller quantities of consumables only because they have low ticket price, which if you had brought a larger volume for the month you could have saved more (just the opposite of the previous)
Low Ticket Price is not necessarily the lowest price at which the goods can be priced.
The pricing strategists play on our irrationality, our notions and perceptions to create packages and pricing that are luring. I am not blaming them. That’s what they are for!
But before you gloat over your next low priced deal, you may want to just stop and think if this is really the best buy for the money you are paying?