Chivas Regal Effect: Thinking a Product Is Good by Looking at It Being Expensive

Let's take a closer look at this concept brought to the economic literature with the famous whiskey brand Chivas Regal.
The shortest summary of the concept of chivas regal effect; "If a product or good is expensive, it is good" perception. In other words, the chivas regal effect is a term used in the case of increased sales without an increase in the price of a product and a change in the quality of the product.

now according to the story; Chivas regal brand whiskeys could not make the sales they expected when they first came out. Although it is trying to gain market share, it has a sales rate far below the desired. then these chivas brothers have doubled the price of their products without making any changes to their products, and unexpectedly their sales have exploded and have continued to this day. two different views have been put forward for this reason. first; The fact is that they have really delicious and high quality whiskeys and by this way their sales are booming by being noticed by chance. the second one; People who have no idea about whiskey or have a lot of knowledge, are constantly getting chivas after getting used to the "good aga if it is expensive" or "what does elalem say". After this strategy, a new marketing tactic emerged and this is called chivas regal effect. and after this process, many companies started to implement this.

For example, the product prices, the price of coca cola's products, which is half the price of coca cola, are bringing their prices to almost equal with coca cola, and with this tactic, pepsi's cola sales have increased.

Another example is in the field of education. Many private universities and schools are advancing with this tactic today. When parents have to choose between a school with an annual fee of 30 thousand TL and a school of 50 thousand TL, they think that school B is better because of the fee and they want to write their children there. Of course, although there is a quality-quantity relationship, quality differences in certain areas, this is the case on a macro scale.

A recent study showed that consumers make some value judgments on a price basis. The researchers found that the participants stated that an expensive product was of higher quality and that in the voting with many different products, they always gave higher scores to the more expensive ones.
it is possible to see this in every field. When there is a new product on the market in any field, its price is almost the same price with a product that has proven its quality in the market for years.

But in general, the chivas regal effect is useful when the person does not know about that product. By doing a half and half market research, you can have ideas on many issues. For this reason, it is always important to always make market research and price comparisons in long-term products, so as not to eat a possible pile.

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