[website] Why three options? The psychology of shopping...

[jinnantonnixx]

Ever wondered why, when you're buying product or service plan, you are always presented with three choices?

You see it everywhere, from buying laptops to choosing phone plans.

This is really interesting reading. It's all down to the psychology of shopping. The luxury top-end lines exist to sell the middle, high-profit products.

 

https://www.jeremysaid.com/blog/customers-will-choose-middle-offer/

 

 

The results of the study showed that, when only two options were available, more people preferred the cheaper of the two: the Emerson at $110. When there were three options, most people preferred the mid-priced option: the Panasonic at $180. [1]

 

Typically, the highest-priced item in a choice set is not the one that is most popular. However, it still serves an important purpose in that it drives traffic to the next most expensive option. Businesses sometimes make the mistake of eliminating their top-of-the-line offering, simply because it doesn’t sell as well as they hoped. By doing so, however, they run the risk of driving their overall revenue down, because they lose the anchoring effect of the most expensive item.

 

How Shortcut Decision Strategies Affect Decision Outcomes :: UXmatters

Edited September 13, 2016 by jinnantonnixx

[pantscat]

I find this sort of psychology fascinating - it's similar to the way that you'll often find some items on restaurant menus that are far more pricey than all of the others... people then think that the middle priced meal (or bottle of wine, etc.) is good value.

 

It's all relative.

[jinnantonnixx]

These things are no accident. People tend to choose the middle option as a compromise. They've convinced themselves that, although it's a bit more expensive that the bargain-basement option, it has better utility and not that much more expensive. They're also happy that they've justified not shelling out of the top tier option as it's normally a lot more expensive and viewed as an unnecessary luxury.

 

The middle option is the product that the company wants to sell to you. The top-tier product exists simply to make justifying the mid-tier products that much easier. Clever stuff.

Edited September 13, 2016 by jinnantonnixx

[pantscat]

Absolutely. The cheapest option is perceived as being of lesser quality... thus the compromise of the middle choice. In reality though - the products are probably very similar bar the profit margin!

[pcstru]

I find this sort of psychology fascinating

Ah, you want the full list?. This sounds like focalism/anchoring; which can be incredible useful in everything from selling a house/car to asking for a pay rise. Exotic & outrageously expensive hi-fi exists mostly for this reason (I'll cut those nautilus speakers some slack but even so).

[pantscat]

Ah, you want the full list?.

 

Well, that's my afternoon dealt with then.

[just_david]

Isn't this the whole halo car thing?

 

most people can't afford a type-r, but might get a regular civic after seeing it.

[Garacesh]

I find this sort of psychology fascinating - it's similar to the way that you'll often find some items on restaurant menus that are far more pricey than all of the others... people then think that the middle priced meal (or bottle of wine, etc.) is good value.

 

It's all relative.

 

Apparently, the 2nd cheapest bottle of wine is usually the one with the highest markup. They say restaurants know that people usually don't want to order the cheapest bottle (though I surmise that it's because they don't want to look tight-fisted on a date), so whichever costs them the least per bottle is always the 2nd least expensive on the menu.

Edited September 15, 2016 by Garacesh

[pantscat]

Yes, pretty sure I've read that before - really interesting.... and usually why I order the house red!

[Andrew_C]

I heard long ago from an undertaker that the second from bottom coffin has the highest mark-up.