Red Bull founder Deitrich Mateshitz deliberately priced Red Bull, the fizzy, nasty tasting tonic imbibed by would be racing drivers, balloonists, and skateboarders because” it makes them fly,” at 4 times the price of a can of Coke, so no comparison would be drawn by consumers.
When you compare the price of a cup of coffee from a bottle of instant coffee, to a cup made from one of the new “pods” that are around, you are not comparing price, the first is a couple of cents, the latter closer to a dollar, you are comparing the cost of a coffee pod to the price of a coffee in the local café of $3.50, so 0.80 seems to be a pretty good price. Rory Sutherland uses this coffee metaphor beautifully to make the point.
Similarly, a drink of water at home has little value, but try getting a drink when lost in the dessert, that’s when a cup of water really has a value.
To consumer marketers struggling with the commoditization of markets, and bricks and mortar retailers battling on line retailers, the key to success is to differentiate, to manage the context in which your product is seen, and to back the differentiation with absolute determination to ensure it remains relevant to consumers.