Question

Topic: Student Questions

Premium Pricing - Do All Buyers Relate?

Posted by Anonymous on 3/6/2011 at 12:15 AM ET 250 Points
Can you offer a response to the debate "Consumers are sometimes willing to pay a premium price" from the negative persceptive?
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RESPONSES

  • Posted on 3/6/2011 at 9:24 AM Accepted
    Your premise -- that "consumers are sometimes willing to pay a premium price" -- is not debatable. It's a truism.

    In fact, consumers are EAGER to pay a premium price when they believe the product they're buying is better than the alternatives. They would actually PREFER to pay a premium price in those cases.

    Why would you want to negate a truism? What is the purpose of this "debate?"
  • Posted on 3/6/2011 at 12:11 PM Accepted
    Time to read "Predictably Irrational," by Dan Ariely. Here's the link: https://bit.ly/bWBs8W
  • Posted by SteveByrneMarketing on 3/6/2011 at 1:44 PM Accepted
    I agree with what Michael and Jeff have posted, however there is a term that may be relevant to your question.

    "Conspicuous consumption" is lavish spending on goods and services acquired mainly for the purpose of displaying income or wealth. In the mind of a conspicuous consumer, such display serves as a means of attaining or maintaining social status.

    I can remember a 1980s story in the LA Times about a Malibu restaurant charging an outrageous amount of money for a glass of sparkling water to illustrate the degree of “conspicuous consumption” at the time. Some people might think it is wasteful to throw away money when there are so many in need.

    hope this helps,

    Steve
  • Posted on 3/6/2011 at 2:02 PM Accepted
    Another book worth reading:

    "The Price of Everything : Solving the mystery of why we pay what we do," by Eduardo Porter

    The link: https://amzn.to/h9FCcE
  • Posted on 3/6/2011 at 4:54 PM Author
    This is a debate topic that has been provided for a student discussion. I am having extreme difficulty with developing my reponse from a negative persceptive.

    Any help is greatly appreciated!
  • Posted on 3/6/2011 at 5:33 PM Accepted
    Whoever provided the topic doesn't understand what debates are supposed to be. You can't debate a fact; it is a statement of truth.

    It's like debating whether it's brighter during the day when the sun is shining than it is on an overcast night. It's impossible to argue the negative.

    Perhaps your solution should be to define "premium price" in non-economic terms. For example, maybe the "price" is a polluted world. So while the consumer might be saving a few dollars in out-of-pocket cost, she would be paying an offsetting [non-economic] price in terms of the polluted world in which her grandchildren will have to live. In a sense, there's never a "free lunch" in either direction.

    I know it's a stretch, but you've been sent on a fool's errand, so the best way to respond may be with a semantic redefinition of terms. Good luck.
  • Posted by michael on 3/7/2011 at 11:01 AM Accepted
    Yes.
    Can you ask an open-ended question?
  • Posted on 3/7/2011 at 4:30 PM Author
    When I posted the question I was looking for a genuine response, not an insult to my education or capability.

    I appreciate the responses and time that most of you took to respond!
  • Posted by Gary Bloomer on 3/7/2011 at 7:32 PM Member
    Dear Terri,

    From a negative POV, "Consumers are sometimes willing to pay a premium price"

    ... IF:

    they have deep pockets,
    they have more money than sense,
    they simply want the thing on offer and have no concept of value.

    ... WHEN:

    they want to gain bragging rights,
    they must have the latest and greatest thing,
    they need to impress other people.


    ... BECAUSE:

    they can.
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