The 60 Second Marketer
BKV's Online Magazine for Marketers


There's a fascinating case study involving Williams-Sonoma, the premier specialty retailer that sells cookware to chefs and food lovers across the United States.

When Williams-Sonoma first introduced a home bread making machine for $275, sales were almost non-existent.

But rather than abandon the product, the company brought in a marketing research firm which suggested they introduce a slightly better model that was priced a whopping 50% higher than the $275 model.

Amazingly, once the higher-priced machine was introduced, sales of the $275 model began to take off.

Why Did This Happen?
In consumer behavior circles, this is called the decoy effect and it involves using one product model to anchor the perceptions of another model.

In the Williams-Sonoma example, consumers said, "I don't know much about bread machines, but if I can buy the $275 model that's almost as good as the $415 model, then I must be getting a good deal."

Action Steps Based on The Williams-Sonoma Case Study
Here are some action steps based on the case study above:
  • Consider increasing your prices. Is there room for a price increase across your product line? I've found that consumers are less resistant to price increases than marketers are led to believe.
  • Explore new ways to tier your current prices. By offering a variety of pricing tiers (e.g., silver, gold, platinum), you're giving your customers more options. Consumers respond well when companies provide options.
  • Offer a variety of payment options. Research indicates that offering a variety of payment options works very well, too. Just giving consumers the option of "three monthly payments of just $19.99 a month" can increase sales significantly.


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Jamie Turner

Chief Content Officer

The 60 Second Marketer

BKV's Online Magazine for Marketers

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