Increase Price to Increase Demand
When something is more expensive, it must be better. This is a typical consumer mindset. The logic behind this assumption is simple: I do not know what materials are used to make the final product I use, however the manufacturer who uses the best raw materials to make a quality product will also charge the most for the same product. So logically the most expensive product in its class is also likely to be the best therein. The entire premium market segment survives on this mindset.
Make the customer desire the ‘exclusive’ product
Even those manufacturers who are not using the most expensive materials in production have now begun to price their products exorbitantly. This is in light of the idea that in order to make a man covet a thing, it is only necessary to make the thing difficult to attain. Consider Tom Sawyer from Mark Twain’s book, painting a fence on a holiday. It is dreadfully tedious work and young Tom has been given the task as a punishment by his aunt. There is nothing Tom would like better than to laze but he must finish this task.
Then the genius uses a superb marketing technique and sells the task to his friends as something that only a true artist can be trusted to do. Not just anyone could wield a brush and create master stokes! What was so far an undesirable chore, was suddenly converted into an activity that all his friends yearned to do. So much so that they were willing to pay Tom in order to have the privilege of painting a section of the fence. Tom sits back in the shade while his friends finish painting the fence.
Create a demand for your product even if none exists
So what if it’s expensive and of not much practical use, I can afford it. That is the reaction the marketer is hoping to invoke in the customer. Consider the case of Tahitian black pearls. James Assael was an Italian diamond dealer who made his fortune selling waterproof Swiss watches to the American army in WWII. After the war he was left with a huge inventory that the Americans didn’t want. Now Assael sold the watches to the Japanese who could not pay cash but bartered them for pearls.
His son Salvador Assael made a killing with pearls and attracted the attention of a Frenchman called Jean-Claude Brouillet in French Polynesia. Assael was told about the black lipped oysters that produced black pearls. There was no demand for this particular product at the time, but Assael invested in them and took them to Harry Winston, a legendary gemstone dealer. He put the black pearls up in his Fifth Avenue store with an outrageously expensive price tag, and the rest as they say is history. Today Tahitian black pearls are considered the most exotic and sought after in the world.
In order to increase the demand for your product it is necessary for the customer to associate it with exclusivity and a status symbol. This works especially well in the premium products range. The more expensive the product the more desirable it becomes.
If you plan to get out of debt by setting up your own shop, keep this little psychology lesson in mind. Set up a fancy store/website. Make sure to package your goods well, let people associate a sense of luxury or rarity with it. This will not be easy. The product will actually have to be outstanding. Make it easy to buy – not by pricing it low – but by accepting credit cards and offering convenient shipping options. Let your product be one of the kinds that people like to boast about having purchased. And then watch your sales grow!
