I’ll just make a reservation that my article does not claim the status of fundamental labor in marketing or production strategy - this is only an attempt to outline the reasons for the consumer choice of goods and services.
Of course, the purchase can be carried out by two categories of persons - us, ordinary people with their addictions and weaknesses, and organizations with their supply departments and procurement commissions. Obviously, in the second case, the purchase will be more balanced and logically justified. There are two factors that determine the choice of goods by companies and conscious mortals:
1) low price of goods;
2) differentiation of the goods.
Low price - the reason lying on the surface and not requiring deep market analysis. Other things being equal, an adequately minded person will, of course, choose a product or service with a lower cost. But quite often, people delete the phrase “with other things being equal” from the previous statement - during sales and liquidations of the assortment they are ready to buy something that they would never need, crowds of customers carry products in their bags that may be slightly cheaper, but worse than competitors' products.
For a meaningful analysis of the price of goods it is reasonable to use two parameters: price-quality ratio and cost of ownership.
Price-quality ratio can significantly change the balance of forces on the product shelf, which we see in the banal analysis of prices. Quite often, it turns out to be advantageous to buy expensive goods, which will perform their functions better. For example, the excessive thriftiness of a grocery store when purchasing refrigeration facilities may result in the latter breaking down and damaging goods by an amount that exceeds the benefit from the stinginess of purchasing managers.
Cost of ownership allows you to estimate the costs not only for the purchase, but also for the use of a product. For example, for copiers, this parameter includes the initial price, the price of consumables, maintenance costs (including independent, because the time of the buyer also has its cost). So, it may seem to an average person that using free software is cheaper than buying licensed programs, but checking such a statement says that it is not.
Product differentiation - the other main reason that inclines us to the side of the purchase of a product. If the offer of one company differs significantly from the offer of the others, then we are ready to pay it large sums of money. Moreover, such a difference may consist not only in the characteristics of the product, but also in non-standard sales and service methods, and in the emotions that we get from purchasing the product.
This factor is the reason for the success of Rolex watches and other premium and super premium product segments. Modern economy is often called the economy of impressions - very often we give money for goods, and we hope to receive not so much it as emotions associated with buying or owning.
I wish you to remain prudent when choosing purchases and not to be led by any false "cheapness" or by the inflated advantages of the product and the high-profile brand!