In one study I told participants that a 250g box of PG Tips cost £2.29, while the same weight of Tesco own label tea cost £1. When questioned about the price, 31% of the respondents rated PG Tips as good value.
I then asked another group the same question but with one tweak. Rather than compare PG Tips to own label it was contrasted with Twining’s, priced at £3.49. In this scenario, the number who thought PG Tips represented good value jumped to 65%.
Brands can apply price relativity in two broad ways. First, don’t accept your comparison set as fixed. Do everything you can to change the field of reference shoppers have to one that is even more profitable to you.
Excerpt from: The Choice Factory: 25 behavioural biases that influence what we buy by Richard Shotton
