There are two basic ways of setting a price for a product. Either a business can calculate the manufacturing costs, add a profit margin, then use that calculation to set a price. Alternatively, a business can look at competitor prices, set a price that is competitive with those rivals, then work out how to manufacture to meet that price.
I doubt though that many consumers pay much attention to either of these approaches. Instead, consumers largely evaluate a price through reference points. For a consumer, value is not necessarily based on manufacturing cost for example, but what they think the product is worth in relation to something else.
For me, this is a starting point for studying the field known as behavioural economics i.e. working out how consumers assess value. There are many theories that explain the influences on the assessment of a price, such as how a price is ‘framed’, whether the product is ‘scarce’, or even whether it ‘signals’ high quality. I’ll go into some of these in future blog posts.
For now though, consider some practical examples. Most of us could buy a reasonable, newish car (four wheels, power steering, speeds of 70mph etc) for around £10,000, possibly less. Is a £50,000 sports car good value then? Well if you simply want to travel from A to B, you could argue no. But if other dealers are selling the same sports car for £60,000, suddenly the price looks good. It’s still £50,000 for a vehicle that essentially goes from A to B, but the reference point has made a difference.
Another example that provokes a lot of discussion: the price of petrol. I know people who will often remark about a 5p rise in the price of petrol perhaps costing them another £3 each visit. Yet, when my local petrol station began selling coffee for about £3 per cup, many customers decided that paying an additional £3 for an additional coffee was no problem. This is probably some form of ‘mental accounting’ process: I suspect petrol is seen as an expensive and painful necessity; coffee is an enjoyable caffeine boost.
Lastly, scale also makes a difference. When haggling with a vendor to buy a house, most of us wouldn’t think for too long about paying an extra £5,000 over the asking price to secure the house of our dreams. But if I added £5,000 to your water bill (bearing in mind that we all need water to survive) you’d probably protest in the streets! £5k when set against a large figure is a smaller proportion and therefore less scary. But it’s still £5k!
There is much more to say on these points, but this is a blog post rather than a book. I’ll save some for future posts. If you’re interested in discussing this or any other points regarding marketing and psychology, let me know.
First event: 10th February 1.30pm – 2.15pm
Bristol-based web design and development agency, Unfold has just launched a brand-new events series, Below the Fold. The series centres successful business people, giving them a platform to share learnings from their journeys. Hosted by Unfold’s founder, Harry Cobbold, these events aim to educate and inform attendees with insider knowledge and tips for success.
What it takes to get your business acquired
The first episode in the series will see Gapsquare’s Zara Nanu taking the guest seat, with Harry interviewing her on Gapsquare’s recent acquisition and what it takes to build and acquirable business.
You can catch the event on 10th February 2022 from 1.30pm – 2.15pm. All events in the series will be held virtually via Zoom for the foreseeable future. If you can’t make the date, you can register in any case and you will be sent the session recording following the event.
Register for the event here.
The new ‘Intro to Game Art’ short course will give you an insight into the world of game art, exploring the range of roles and essential skills needed to get you started when exploring a potential future career in game art. There is a host of exciting modules that your tutor will guide you through, including:
Planning and producing work to a design brief.
Working in the games industry
Concept art for computer games
Modelling for computer games
This new and exciting programme is designed to equip individuals (aged 19+) with the technical skills, knowledge and understanding needed to produce digital content across several platforms, ensuring you can use social media most effectively for your small business, sports team or trade.
This course will provide a great opportunity for you to develop media production techniques, such as camera operating (on mobile devices, DSLR cameras and broadcast cameras), video editing, graphics and motion graphics to produce content for Instagram, TikTok, Facebook and more. There is a host of exciting modules that your tutor will guide you through, including:
Planning your Project
Camera Production Techniques
Sound Recording Techniques
Editing Techniques
boomsatsuma launches a new BA (Hons) Visual Effects Degree, with the appointment of John Rowe as Head of Animation and Visual Effects, Nov 21.
Extending boomsatsuma’s Higher Education skills training into the expanding Creative Industries sector, the new BA (Hons) Visual Effects, and newly announced BSc (Hons) Web Design and Development Degrees, are in-line with the national strategy for digital skills training, with transferrable skill sets that cross over into many industry sectors.
John Rowe has written the Visual Effects focussed course content, with industry support and approval, and he will lead its delivery to students from September 2022. He brings extensive experience and expertise in 3D visual effects, including his previous role creating digital courses at the National Film and Television School. John states:
“This course will give students the skills they need to gain employment in the expanding creative industries. It is driven by the needs identified by employers, both now and in the future, so we are listening closely to our commercial partners when constructing course content. It is particularly focused on training and empowering the storytellers of the future, using state-of-the-art technologies and software.
“boomsatsuma has a proven history of connecting the diverse communities across the West Country with creative companies, through education pathways that empower students to find their own voices, which I am delighted, and proud, to be a part of.”
The new Visual Effects degree supports boomsatsuma’s ambitious plans to develop socially diverse talent for the creative and tech sectors. It complements boomsatsuma’s existing degrees in Filmmaking (Production and Post Production) and Game Art and will be designed to encourage people to think about visual effects and game engines not just for the creative industries, but also for other sectors – from health to architecture.
For more course information and details on how to apply follow the link to https://www.boomsatsuma.com/visualeffects.
Bristol Institute of Performing Arts
Our team is made up of industry professionals from all corners of the creative industries. Performers will be put through their paces by our academic team of performers, directors and choreographers which is supported by our Student Experience and academic support teams.
Our Purpose Built Campus
The Bristol Institute of Performing Arts is based at the SGS WISE Campus a £17.5 million pound campus designed for sporting, performing and visual arts excellence.
Olympus Theatre
The Olympus Theatre based at the Bristol Institute of Performing Arts/SGS WISE Campus has been producing and receiving theatre on a local and regional scale for almost 15 years. Since opening in 2005, the cultural and creative significance has exceeded expectations, making The Olympus a premier destination for theatre performance and education in the South West region.
Our Students perform in our 250 seat auditorium which holds over 35 productions a year through our in house production team.
Studio 22 Theatre
The Studio 22 Theatre is our most diverse performance space, kitted out with fully flexible seating which allows a variety of production design styles. Students will be immersed into a space designed for intimate productions, showcases and cabaret performances. The Studio 22 theatre can accommodate an audience of up to 80.
10 Studios & Workrooms
All our dance studios are equipped with sprung flooring, mirrors, barres and a speaker system. Our rehearsal rooms also feature a range of equipment and speakers
Studio 1 – Dance StudioStudio 2 – Rehearsal StudioStudio 3 – Dance StudioStudio 4 – Dance StudioStudio 5 – Dance StudioStudio 6 – Rehearsal StudioStudio 7 – Rehearsal StudioStudio 8 – Rehearsal StudioStudio 9 – Rehearsal StudioStudio 10 – Practice RoomWorkroom 1 – Scenic Design WorkshopWorkroom 2 – Technical TheatreWorkroom 3 – Costume & Scenic Store
You need to load content from reCAPTCHA to submit the form. Please note that doing so will share data with third-party providers.
More Information