The Chivas Regal Effect: How Brands Are Fooling You To Pay More For Less

This is the story of how an obscure whiskey placed itself amongst the finest blended Scotches and opened the way for marketers so they can literally… fool you!

Chivas Regal, the now premium Scotch whisky, was once a… not so reputable brand. One day, in an effort to position the brand on the high-end market, the company, instead of changing the quality of the whiskey decided to change the price! Based on the commonly accepted perception that you get what you pay for, consumers immediately responded to the increase of price by… buying more! Sales increased rapidly and Chivas Regal soon created the image of a top of the line product. But, the whiskey was exactly the same!

The story became known as the “Chivas Regal effect” and the term is used in the case when an increase in price of a product drives increased sales without a change in quality of the product. (the article continues after the ad)

In the years to come, many companies followed the same recipe. In the 1950s, Coca Cola was twice as expensive as Pepsi. Yet, Pepsi sales increased after they raised their price. Many universities are known to follow the same strategy for their tuition since many parents assume that a higher-priced education is a better education.

If you like what you read, then you will definitely love this one: Don’t Get Fooled Again: This Is What ‘Genuine Leather’ Actually Means

Photo: Luxurious Magazine

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