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Previously, the value of a product determined its price. In this line, customers would look at the product’s qualities, such as the quality of material making a piece of clothing, to determine what it should cost. However, things have changed, and the price of a product is determining its value. Therefore, when a customer steps into a supermarket, for example, he/she doesn’t go for the product that has the highest quality; many don’t even know these qualities anyway, they just look at the price tags, and the most expensive product has the highest value (Serwetz, 2020). The concept of price-determining the value of a product is true and has been the main way consumers have been using to select products when purchasing. The concept is true for companies such as Gucci, which make elegant products have always put a higher price on their goods, and many people do not care about the quality of their goods; having a Gucci expensive shoe is all that matters. Despite the competition from other cheaper products from places like China, Gucci continues to prevail by selling expensive products that consumers believe are worth the price.
TJX retailers have survived the price-value problem that has bankrupted other brands. Their price level is lower than that of other retailers such as Macy’s, but they have been consistent in their pricing, and customers have trusted the value of their goods based on the price (Serwetz, 2020). If TJX continues with the success, it should never try to restructure their price-value relationship. Brooks Brothers messed with their price-value relationship when they lowered the price of their shirts. If Brooks Brothers are to survive, they need to redesign their shirts and tag high prices, making consumers believe that the shirts are worth that price. Macy’s have also messed with the price-value relationship by lowering the price creating a mentality that the product will be cheaper tomorrow than it is today. Macy’s have lost their customers’ trust, and to regain it, they need consistency in their prices as all their customers need an assurance that their products are worth that price. Neiman Marcus has taken a similar route to that taken by Macy’s, which will have fatal results if they do not change. All their products have a 50% discount, and with the current price-value relationship, this strategy does not work. If they are to escape their downfall, they need to make customers believe that their products are worth the price they have tagged.
As a consumer, the price determines the value of the product I purchase; if it’s expensive, it’s good and original. I trust the seller’s prices as a determinant of the values that they sell, and this has, in many circumstances, helped me get better products. If the use of price to determine the value of a product is anything to go by, the statement cheap is expensive would serve me as a customer right, which would be a breakthrough in my purchasing strategy.
Serwetz, M. (2020, June 22). Not understanding the relationship between price and value can be (Is, was) lethal. I, Sourcerer Business & Marketing Community. https://www.isourcerer.com/2020/06/not-understanding-relationship-between.html