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3:40 pm - Sunday September 25, 2016

How much are you willing to spend on lifestyle and image?

| Economics, Money Saving Tips | Rating: 4.5
by Numan

I enjoy the occasional meeting in a coffee shop now and then. An interesting thought came to me today after having ordered yet another overpriced cappuccino. How much am I willing to spend on my concepts of lifestyle and on my image?

The more observant of us have probably noticed Coca-Cola, Pepsi, Starbucks or Nike don’t just sell drinks or shoes. They sell lifestyle. Advertising is in part about creating associations between the product and our desires. We buy these products because we’ve been ‘programmed’ to associate Coca-Cola with freshness and coolness for example (there are many other examples).

The issue of spending on lifestyle is complicated and vast in scope. Hopefully I’ll write more on the subject in the near future. In this post I intend to linger on a very specific and annoying aspect of it. If you’ve ever ordered a coke for 5$ you probably know what I’m writing about.

Pricey places allow themselves to charge extra for the most basic products. Ordering a 5$ coke at a fancy restaurant is the best example for paying purely for lifestyle and image.

Advertisers and companies are not dumb. They do charge extra for the “lifestyle factor” but they usually offer greater value in either design, originality, technology, innovation and more. This greater value offered by no means explains the price gap between brands and non-brands but it allows us as consumers to explain to ourselves why we just paid 150$ for shoes (we solve the cognitive dissonance created).

Overcharging for a bottle of coke is purely charging for image. True, the waiter did serve it to you with a twist of lemon but it’s still a coke. One of the reasons pricey restaurants usually serve premium brands (like Evian for ex.) is to justify the huge difference in price between plain water and their water.

Furthermore, I believe expansive restaurants actually adopt higher price levels for basic products in order to relay their message of exclusivity to potential customers. If you see a 10$ bottle of water on the menu please think again if you’re one of us or not.

Consumption is on of the forces of modern living. Paying for lifestyle is a relatively new and evolving phenomenon which I find very intriguing. Hopefully I’ll post more on the subject in the near future. If you find the topic interesting please let me know.

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