Monday, April 26, 2010

Leverage Barriers to Increase Value

When George Herbert Leigh Mallory was asked why he wanted to climb Mount Everest, his reputed response became what has been termed the most famous three words in mountaineering: “Because it’s there.” The need to overcome barriers can make the objective more attractive.
      To see how this applies to retailing, let’s move from the world’s highest mountain peak to the world’s toughest potato chip package. In a classic study based at University of Texas-Arlington, researchers investigated the relationship between the taste of a potato chip and the ease of opening the package. For some participants, the potato chips were packaged in a wax-coated bag which could be easily opened. For the other participants, the polyvinyl bag was so difficult to open that participants resorted to techniques like using their teeth or standing on the bag while pulling at a seam.
      In blind tests conducted before the main study, whether the chips were in the wax-coated bag or the polyvinyl bag had no effect on people’s ratings of crispness or overall taste—as long as the researcher, not the participant, opened the package and served the chips. But when the participants had to open their own packages, which of the two types of bag resulted in higher ratings of crispness and taste?      Yes, the polyvinyl bag.
      Asking people, “Which tastes better?,” is not the same as asking, “Which would you probably buy?” People often settle for a lower quality alternative when they can get to it more easily or inexpensively. If deciding between providing your product in the equivalent of the wax-coated bag or the polyvinyl bag, you might choose the less burdensome alternative. But if your product comes with necessary barriers to usage, look for ways to leverage those negatives so as to increase the perceived value of the item.

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