This article explores how businesses, like Coles and Woolworths, can effectively raise prices without significantly damaging customer trust. It delves into the power of justification in influencing consumer perception of price increases and highlights how seemingly rational economic principles can be overturned by behavioral economics.
If Coles and Woolies wanted to get away with higher prices, they just had to tell us.simple. But there is a getaway car for any business wanting to keep customers coming – even after pumping up their prices. False discounting? No. Read on.
Now, you might expect customers to behave consistently to a price rise, regardless of the justification given for it. After all, an $8 packet of chips is still sucking more money out of your bank account than a $5 packet, regardless of the reason given for it. By contrast, the best way to fend off angry customers is to either blame it on cost increases which “have to” be passed on, or to say the price increase covers extra costs needed for product development. Essentially, it has to be either something out of a business’s control, or aimed at improving the customer’s experience.
Price Increases Consumer Behavior Inflation Justification Behavioral Economics
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