The Art of Seeking a Bargain
Seeking a bargain comes in two forms:
- Monetary Advantage: Making the consumer feel like they are saving money.
- Psychological Advantage: Making the consumer feel smarter or savvier than others.
Capturing a consumer’s mind is somewhat of a fallacy; you cannot truly own someone’s mind, much like in a relationship. No matter how intense the love, if a better option appears, people may switch preferences—similar to how Android gained significant market share from Apple. The key insight is that consumers love to feel like they’re getting a bargain.
Consider luxury shopping: when you can afford Hermes, you wouldn’t typically opt for Louis Vuitton if it feels like a downgrade. Those who understand this are often those who have achieved financial freedom. The idea is that when your budget allows, it’s called shopping; when your budget is stretched, it becomes a ‘stupidity tax.’
A white-collar worker earning a modest salary might save rigorously to buy a designer bag, but to the truly affluent, it’s just a regular bag for carrying things. However, this demographic is limited in size. The broadest market for luxury goods is still the working class who stretch their budgets to own a piece of luxury, capturing both monetary and psychological bargains. They believe they are making a smart choice, but often they are simply fulfilling a deep-seated desire to feel a part of a more affluent class.
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