Owen @ Fat City put up a great list the other day about the 10 liquors you should have in your house bar—check it out if you’ve ever wanted to get your own little watering hole started.
The list mentions Most Wanted Vodka, a premium vodka at a not-so-premium price. It is distilled in Atchison County, KS (seriously) and it is probably the best value in vodka you can get in the KC area. I am by no means an expert on spirits, but I have tasted several premium brands (Belvedere and Grey Goose among them) and they’ve got nothing on Most Wanted.
Oh--and Most Wanted’s price is more in line with, say, Smirnoff’s regular-quality vodka.
Here’s where economics, marketing, and psychology step in: if you knew very little about Belvedere and Most Wanted, and one was in a prettier bottle and came from Poland, and the other was in a plain bottle and came from Kansas, which would you buy?
Now ask yourself the same question, except the Belvedere costs twice as much.
This is the concept of premium pricing at work. The fact that Belvedere costs more gives the impression that it is SUPERIOR, even though it probably isn't.
Okay; that’s a comparison of two different vodkas, which makes preferences subjective. For objectivity's sake, a study recently showed two groups that purchased the same bottle of wine. One group paid something like $7 per bottle, the other paid $30. The group paying $30 was much more satisfied with their wine and much less critical of its quality.
On one hand it sounds crazy, but on the other it makes total sense. We want to feel justified in our decision to fork over more money, even when it's not justified at all.
This is not to say that qualitative aspects don’t come into play on some products…but which products are they?
When does paying twice as much for a DVD player make sense?
Or a polo shirt?
Or a set of golf clubs?
How do you know?
What do you readers pay extra for, and why?