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Price Signalling: A Fine Balancing Act of Interpretation

Recently, I repeat watched a stand-up comedy episode by Deepika Mhatre, who works as a maid in Mumbai, who also tried her hand at stand-up comedy.  Through several of her stories, she highlights the way price acts as a social signal and a quality signal in her day to day experience.

What does the episode reveal about the conditioned behaviour regarding price in India?  The instinct is always to negotiate with the seller on price in order to extract value for oneself.  And what matters in price negotiation is the relative bargaining or negotiating power between seller and buyer.  When Deepika sells jewellery on the train, the women who buy from her, try to extract some more value from her because they would like to project themselves as having buyer power.  But when the same women shop at a mall, the stores in the mall strongly signal size, scale and power.  Hence fixed prices on stickers.  And the same women accept their weaker bargaining position and don’t try to negotiate.

The media sign that interfaces between her the seller and the buyer or her family is the ‘mall sticker’ as she calls it.  The price when stated or spoken, has a different effect and evokes a different response from the buyer than when it is printed on a sticker and attached to a pack.  Note that it is important that the sticker should match, in its visual characteristics, the stickers that companies put on products when they sell them in a mall.  Just any sticker won’t have the desired effect.  Only a “mall sticker” will.

Price in marketing is often taught in purely economic terms and under the false stereotype of “Rational Man” or “Homus Economicus”.  Whereas, price in semiotic terms is often a social signal that people decode and draw inferences from. Depending on the signal and inference drawn, their experience itself can be altered.  Watch Deepika talk about cooking fish for her relatives and the effect of the mall sticker once again.

So how do marketers usually undertake price signalling?  And leverage the connotations of wealth, privilege, social class, status and sophistication/cultivated sensibilities that accompany a price figure? Or even the implicit power dynamic between buyer and seller.  They largely do so via the design codes that they use in the product, packaging and in the retail space.  They use graphics, colours, materials, shapes, language and naming/labelling at the first level and an overall concept and narrative at the next level to carry out price signalling.  Products like durables and cars also provide feature lists to justify their price.