Unmask Utility Blindness for Shoppers

Why will shoppers pass up purchasing an item package which carries high value for them at the price you’re charging? For that matter, why will shoppers sometimes take advantage of a discount on a package they’d realize, if they only thought about it, has limited value to them?
     According to researchers at China’s Tsinghua University, a major explanation is that busy consumers often will look too closely at the amount of the discount, and this blinds them to the actual utility of the bundle for their own use. This is most likely in sales of bundled items which don’t seem to go together.
     The evidence was in experiments with students at a major North American University who were asked about their willingness to buy a product bundle. In one study, the offer cost $92, but it was presented in two different ways to different groups of study participants:

• Pay $72 for a computer printer if you also buy an additional product for $20.
• Pay $92 for a computer printer and receive an additional product worth $20 at no additional charge.

     For some of the people in each group, the additional product was an ink cartridge for use inside the printer. For the other people in each group, the additional product was an optical mouse.
     With those offered the printer cartridge, how the offer was presented didn’t noticeably affect the willingness to buy. The willingness was much the same whether or not the cartridge came for free or required a $20 payment. But with those offered the optical mouse, the study participants’ expressed willingness to buy was higher when they were told they’d get the mouse for free. It seemed like a better deal.
     The researchers advise retailers to unmask utility blindness in shoppers for product bundles by pointing out how the items fit well together. Researchers at Pepperdine University and Northwestern University give similar advice.
     Participants in their study said they’d pay $2,000 for a high-definition television and they’d pay $10 for a video cable, but later said they’d expect to pay $1,950 for the combination.
     The same phenomenon occurred when researchers paired an inexpensive tote bag with a premium-priced suitcase. Grafting an inexpensive item onto an expensive item cheapens the price image of the expensive item if one of the items doesn’t fit into the other.
     Avoid the price depreciation by talking about the synergy of the items.

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