To illustrate my point, I bought two bottles of water from a local 7-11. One was a gallon of water. It cost $2.29. The other was a liter, and it cost 2.99. Why the disparity? Why did the liter, which had 300% less water cost more? Why do we pay more for less in this situation?
When it comes to price there is more to it than high or low. It's all about the perception of value.
From the Business...
Companies should get customers to focus on factors other than price such as comfort, durability.
Focusing on at least one important attribute makes customers less likely to look at a product in terms of price but rather in an important attribute.
How can categorical reasoning be controlled?
From the consumer...
It is difficult for consumers to control this reasoning as for decades research has shown that we've adapted to this method and used to simple decisions.
When walking into a store do you feel influenced by categorical reasoning (where you are more likely to pay more for two products sold separately than if they were bundled together)? Why or why not?
How can this affect cable companies as they try and bundle services to compete with the growing streaming industry and companies like Netflix ?