Return to our Home page Search
Click here for the hotel and hospitality news from around the globe Hotel, Travel and Hospitality Articles Videos and in-depth Interviews
CONCIERGE DESK
Read more now
Read more now
Read more now
The Price Value Continuum: Anything But?
By Vijay Dandapani ~ Hotelier's outlook on NYC, travel and the industry
Wednesday, 8th January 2014
 

Two recent events in vastly contrasting industries serve to bring the spotlight on a long suspected tendency of consumers to equate price with value.

One was the  the recent conviction of a high profile wine dealer  who cleverly (but not overly so) slapped on labels of expensive vineyards on vanilla wine while the other was the second successful bid for replacement of fighter jets by the lowly priced but evidently highly valued Gripen jet from Sweden that beat out more marquee names.

Consumers rarely have complete information on most products and even services and use various strategies to fill the gaps in their knowledge as they consider them for purchase. Deciding on whether a product that is priced low is one of low value or not or whether one priced high is worth that tag or not often appears to flow from a seemingly inexplicable decision making process.   The success or failure of many a brand hinges on that process which essentially follows the zero-one law of probability which states that either an "event" will almost surely happen or almost surely not happen.

The (fraudulent) wine-merchant took the easiest route to hoodwinking his clients by forging labels for rare and pricey wines and then attaching those labels onto bottles filled with blends of much cheaper vintages. He thereby preyed upon customers penchant for exclusivity that made an inadequate allowance for real quality; that his customers were not parvenus but those with long-standing wealth and presumably taste did not serve to unmask him.

The Swedish jet maker had to overcome decades long inhibitions that determined, seemingly without corroborative evidence, that the more expensive a fighter plane the better it is. Its competitors, France's Rafale in particular remain incredulous that they lost out to an inferior product with one executive derisively referring to the outcome as the pick of a Fiat Punto over a Ferrari in a race.

In the service industry, consumers seem to be a bit more savvy as the experience of Hyatt Place demonstrates. Starting with a staple of some 150 hotels with the cumbersome name of AmeriSuites and languishing brand recognition the company rebooted and ramped up the product as Hyatt Place which it internally places lower down its totem pole where the Park Hyatt brand rules.  Nevertheless, Hyatt Place has proven to be the real race horse in the stable with remarkable growth.  Today it makes up nearly 35% of the company's total number of hotels worldwide.

And in some cities, particularly New York, rates on the lower placed brand  on some days appear indistinguishable from the ones higher up in the pecking order.  Clearly the new entrant is up there in the price value continuum.

Vijay is Chief Operating Officer and part-founder of Apple Core Hotels- a chain of 5 midtown Manhattan hotels offering value and comfort in the heart of the city. Member of the board of Directors - Hotel Association of New York.

Read Vijay's blog HERE

Advertise with 4Hoteliers.com ...[Click for More]

~ Important Notice ~
Articles appearing here contain copyright material. They are meant for your personal use and may not be reproduced or redistributed. While 4Hoteliers makes every effort to ensure accuracy, we can not be held responsible for the content nor the views expressed, which may not necessarily be those of either the original author or 4Hoteliers or its agents.

Learn more about DigiJames - in room technology
Advertisment  
 Related Articles  (Click title to read)
Delightfully Engaging Customers.
Have Boutique Hotels Broken The Code?
Single-Feature vs. All-in-One: The Tide Is Changing.
Data Driven Employee Performance and Customer Satisfaction.
 Latest News  (Click title to read article)
UK chain hotels market review - March 2014
Thursday, 24th April 2014

Four Seasons soars to new heights with hotel industry's first fully branded jet
Thursday, 24th April 2014

Customer satisfaction with airlines remains low
Thursday, 24th April 2014

New Generation: new hotel guest technologies for new hotels
Thursday, 24th April 2014

Bangkok riverside hotels team up to promote Mice sector
Thursday, 24th April 2014
 Latest Articles  (Click title to read)
What Marketers Talk About When They Talk About Customer Experience
Thursday, 24th April 2014

NYC's 10 Most Decadent Chocolate Desserts
Thursday, 24th April 2014

Ritz-Carlton Reserves Focus on Social Storytelling
Wednesday, 23rd April 2014

Seeing Returns - Building Loyalty at Hotels Through Digital Customer Experience
Wednesday, 23rd April 2014

The Most Powerful Man in Online Travel? Sites Sunk By Google Blitz
Tuesday, 22nd April 2014
 Most Read Articles  (Click title to read)
Global Update: Who's Where and Doing What - Jan 2014
The Top Trends in Search for 2014
The Digital Direction Part 1: Fundamentals of Digital Marketing and Why it is Vital Hotels Understand
Global Update: Who's Where and Doing What - Feb 2014
Expedia's Top Five Conversion Tips

© Copyright 4Hoteliers 2001-2014 ~ unless stated otherwise, all rights reserved.
You can read more about 4Hoteliers and our company here

Use of this web site is subject to our
terms & conditions of service and privacy policy