Researchers at the California Institute of Technology announced results of a wine pricing study earlier this year. The study was done to analyze the behavior of pleasure centers in the brain.
When taste testers tasted a wine that was priced at $45, they reported that it tasted better than the same wine when the price on the bottle was $5 (the actual retail price of the wine). The same thing occurred when a wine priced at $90 was re-tasted with a price tag of $10 – it came back with poorer reviews.
The study showed – through MRI brain images – that the brain reacted differently and at higher levels to the higher pricing, or more likely, the higher perceived value. The same thing occurred when more expensive vintages were tested.
Interestingly, ABC News filed the story under health, rather than business.
Who are you really making happy when you compete solely on price?
Additional viewing on this topic: Penn and Teller’s show about bottled water, which is all about managing perception and value.
Warning to viewers: this video uses the word “BS” frequently (it is the title of the show, after all), but there are some very good marketing lessons to be learned in this 13 minute video.
More on pricing:
Precise Pricing Pays Off
Can Pricing Strategy Affect Your Brand?