Price as the Final Decision Variable

How do you make purchasing decisions?  Where do you start?  If you need a new pair of shoes, a new car, a nice dinner, or even a place to get gas, how do you proceed in finding these items?  If you're like many people, it is simply a numbers game for you.  You pick the best price, the lowest number, and you think you are getting the best deal.  You start with price.  You look down the shoe rack and find the cheapest shoe.  You browse auto trader by "price: lowest to highest" and pick the car at the top of the page.  You got to McDonald's.  You use your 'Gas Buddy' app on your smartphone to find the cheapest gas station nearby.  Without a doubt, you are saving money.  But is this the best way to make purchasing decisions?  Are you getting the most for the money that you are spending? You are not really starting with price.  Even if you think that you're simply looking for the cheapest option, there are categories you have ruled out before you've gotten to price.  Look at the shoes you are considering.  Are they boots, tennis shoes, flip flops, dress shoes, or some other kind?  You may be grabbing the cheapest pair, but they are the cheapest within a given category.  Look at the page on Auto Trader.  You're not getting the cheapest car.  You're getting the cheapest red Trailblazer  within a 75 mile radius, made between 2000 and 2004, with less than 100,000 miles on it.  McDonald's is cheap, but the Aldi next door has a rather filling can of kidney beans on sale for $0.39.  You've merely decided that you need a two to three course meal at a restaurant.  And the gas?  How far are you willing to drive to save a few cents?  Chances are you've eliminated the gas station advertising $0.20 a gallon less but that is a few states over.  We already inadvertently eliminate certain options in our purchasing decisions, because our subconscious knows sometimes better than we do that there are criteria more important than price.  As a matter of fact, price is only important as a differentiator between two or more products about which we are completely indifferent.  Price should be the last thing to consider.  We should work down to price rather than up from it.  We should walk into the shoe store, looking for shoes that fit our needs for comfort and style.  It isn't until we've narrowed it down to a few different pairs that we should even look at the price tag.  Before deciding between Trailblazers, we should look at the pictures and read about the dealership.  Maybe if you thought about what you really wanted to eat, McDonald's wouldn't even be an option.  And the gas station?  Maybe it is on the bad side of town and is currently being robbed when you go to fill up.  Next time you are shopping for shoes, a car, a meal, gasoline, or anything else, remember to consider price only as the final decision variable.  Weigh in on all other dimensions first.  We spend money, not to save money, but rather to get value.  The fact is, when we leave price out of the equation until only a few products are left to decide between, we may end up spending twice as much more and not even know it...but we will not care.  We will be getting what we want.  Maybe you spent $20 at Olive Garden when you could have spent $10 at McDonald's, but it is only when you include that $10 reference point within your range of possibilities that it matters to you.  If you eliminate 'McDonalds' from your decision set, spending $20 on dinner doesn't seem so bad.  You can always get something cheaper, but don't fool yourself into thinking you are getting a better deal.  When you decide on price alone, you are more often than not getting ripped off.  http://www.howdoesthatmakeyoubuy.blogspot.com