Buying Decisions and the Notion of Price-Value

By Fabian, Nelson | Journal of Environmental Health, June 1994 | Go to article overview
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Buying Decisions and the Notion of Price-Value

Fabian, Nelson, Journal of Environmental Health

I've had my share of the experience of being hit over the head with a hammer. On one of those occasions, the subject of the lesson was "price-value." Fortunately, the fellow with the hammer was astute enough to recognize that I wasn't getting it, so he continued the pounding until I did. I shall forever be thankful for his persistence, for in spite of the headache, I did learn a valuable lesson that day.

The circumstance that brought us together was the matter of negotiating a hotel contract for one of NEHA's conferences. The fellow holding the hammer was a sales manager. His message was that his property offered a price-value so impressive that if I knew what I was doing and if I truly had the best interests of NEHA's members at heart, I would sign on the dotted line. (By the way, I did end up signing, but only after satisfying myself that the value for the price was truly exceptional.)

Price-value. What does it mean? We've all heard the expressions "you get what you pay for" and "if its cheap, it must be junk." These pearls of bumper sticker simplicity lack for they focus mainly on price. Good buying decisions are based on price AND VALUE. Moreover, it is NOT the case that value and price always increase (or decrease) in equal amounts. In other words, because one product is three times more expensive than another doesn't automatically mean that it has three times the value! So much for the bumper sticker answers.

Good buying decisions are those where the buyer obtains as much value as possible for the least price.

Any product can (and should) be measured by its price and its value. Often times, that's not easy for value is frequently a uniquely personal assessment. A bottle of aspirin can be worth $.20 to someone feeling just fine, but worth $20 to someone with a roaring headache. A ticket to an opening day ballgame can be worth $50 to the sentimental fan intent on saving his ticket stub, but not worth $5 to the person who doesn't care for baseball.

In countless instances like these, buying decisions are made as much on the value of a product as on its price. People don't generally pay high prices for products of little value. Similarly, people don't generally pass up buying something of high value when the price is low.

NEHA too has products. Therefore, discussions like these are very much relevant to us. We offer (sell) memberships, registrations to our annual conference, credentials, publications, and so on. Inasmuch as we have costs that go into building these products, unfortunately, we cannot give these products away. As such, we have to make pricing decisions.

We also function in a highly competitive arena that makes price-value considerations all that more important. Our buyers (members) have options. Environmental health and protection professionals can choose from between a number of different professional societies for a professional home.

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