dan sandler

Actual vs. Perceived Value!

There is a concept of when you buy something, it costs an amount based off of what it's value is. The problem I always run into is how anything brought to market equates the value charged to the cost. Let's put the quantification of "how much the product is cost to bring it to market aside" and focus on the intrinsic costs of it on the consumer.

There is the "why you need it" argument, an amount to match what it'll take to get it. There is often the "who its better than" argument but the difficulty is identifying still lay with whatever "it" is, is whether or not its worth it.

An excellent example of cost to value provided are cable and wireless phone industries. The competition battles in both industries are tremendous towards out marketing each other. The irony is that when an analysis is conducted on what's offered shows that both offer identical services. The consensus is that there is no real value benefit the consumer for any of them. It could be looked at as misleading the consumer and it would be a fair statement. In the advertisers defense, their message focus is to show the best they offer.


"Caveat emptor"


Let the buyer beware as we used to see but seldom hear anymore. The consumer has a very difficult job. Does the low monthly cost plus fees, taxes, and accessories make any monetary sense and provide good value?

Everyone knows what they absolutely need to survive and can differentiate from what they want. We cannot survive without food/water/shelter but we can without high speed Internet, wireless phones or cable TV. We need the latter things to do other things so what kind of value to you place on it? Also, how much of it, do you really need?

A Mercedes and a Yugo are both cars and while one is more luxurious an expensive than the other, they still have the same function of taking you to McDonald's. So does the Mercedes have more value or the Yugo? How much of anything do you really need? The popular perspective is that you should want fancy expensive things to make yourself happy. The reality is you'll pay more for perspective and think its value.