When purchasing products or services, we typically imagine the value detached from the price, but in some cases, the value is actually increased by the price.
Take tourist attractions for example. We are currently in the Yucatan in Mexico and went to visit a cenote today. There are many around, each with different entry fees. Part of the value of going to a more expensive one is that there are fewer people.
The price adds value.
This is true of all luxury goods. Part of the value is the fact that they exclude people.
It is easy to see this when it comes to an experience where the price means a less crowded and more enjoyable environment. But it is also true of things like networking events, where a high price means better people to network with. Or even with cars or clothing, where the high price changes the nature of the signal that you are sending by owning the product.
Obviously, this only works to a point–you can’t increase a price to a point where you are no longer making enough money to survive– but it is still a fascinating aspect of pricing that is valuable to thing about.
Leave a Reply