Bizarre!! But is it, really?http://www.mindfresh.in/wp-content/themes/corpus/images/empty/thumbnail.jpg 150 150 Kirtanya Kirtanya http://0.gravatar.com/avatar/3c89ef1bc632e1d15e14e03198a549d3?s=96&d=mm&r=g
This incident happens in a jewelry shop at the U.S. The owner, a woman in her early thirties, had some trouble selling an allotment of jewels made of turquoise. That particular time the city was teeming with tourists. All day long people walked in and out of the store, but strangely no one seemed to be taking a second look at these jewels. Now, this really was surprising because the jewels were very good quality and the price was highly reasonable for its caliber. Desperate to sell them she had placed the jewels in a prominent location, attractive setting and had given standing instructions to the sales personnel to push them hard on the customers.
And the employees had employed all the sales tricks they were privy to … still no takers! The turquoise for all practical purposes was jinxed.
The end of the month, one day night, the lady decided to close the accounts, resigned herself for a heavy loss, and scribbled a post it note to her assistant to price all jewels in the display case “…X ½ “ the next day.
The next day evening, when she returned to the shop, she was obviously not surprised to find every single piece of the wretched jewels sold out. But she was stunned to find that every piece had been sold at double the price of its original value. The assistant had deciphered her scribble of ”…X ½” as “…X 2” Andy people simply rushed to buy them!! An inexplicable demand was created over night.
Bizarre!!? why did the jewels which had trouble selling at half the price suddenly fly out like the tickets for a concert of shakira’s belly dance at a ludicrously high, double the price?
What forms of behavior, what instigating factors were responsible for this typical behavior? Try to imagine yourself in the scenario. Can you see what would you have done? What do you think of the dynamics?
Share your views before we conclude this article with a very interesting understanding of ourselves and our world…
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When all other items look normal at normal price, this particular jewel, because of its sheer beauty/finish/quality, would have evoked a suspicion into the customers mind that the price would be too high to afford. Hence, after a short glance, nobody even bothered to query the price of the jewel. But after displaying the prices of all items, the suspicion has been thrown out of customers mind and also made an impression at the first sight itself. Eventually, due to the high quality of this particular jewel, all of them have been sold out!
In this, X 2 in place of X1/2 does not have any effect!
Thanks for the reply. Nicely thought!. But the facts are that the low prices were displayed in big letters to attract attention. The jewel cases were displayed in prominent location as well. But nobody bothered with them. What made the difference was the “tag X 2”.
The reason for the bizarre behavior lies in certain mechanical programmings that blindly guide human behavior, very interesting unconscious behaviors, which we will cover in the sequel to this blog. Thanks again for expressing interest. 🙂
This kind of behavior is well experimented under Behavioral economics. Dan Areily’s book “Predictably Irrational” explains this scenario.
We equate quality to cost. Higher the cost , better the quality is what we think.
Legacy items and ornaments do not obey basic demand and supply economics. It’s irrational that demand is generated by increasing price but it’s predictable in case of ornaments ( or any luxury items where cost is based on design, legacy. etc.,)
But items like computer will not work in this fashion as you know how to compare a computer configuration to other shop computer configuration. With computers you have an anchor to compare.
In ornaments you don’h have an anchor to compare.