How does quality affect price perception?

Why do people often associate higher prices with better quality?

People tend to believe that higher prices indicate better quality because of the perception that more expensive items are made with superior materials or craftsmanship.

Can you give me an example of this in real life?

Sure! Think about luxury brands like Rolex or Gucci. Their high prices create a perception of exclusivity and superior quality, which attracts consumers.

Does this mean that lower-priced items are always seen as lower quality?

Not necessarily. Some consumers look for value and may perceive lower-priced items as good quality if they meet their expectations.

How can businesses leverage this perception in their marketing?

Businesses can highlight quality features, use premium packaging, and create a strong brand image to justify higher prices and enhance perceived value.