So I want to talk to you now a little bit

about the interaction between price and the buying process. I imagine it has
occurred to you that
price takes on a different role, depending on what kind of good
you're buying, what product or service you're interested
in at any given point. And to do that,
I'm going to define a couple of terms, and I do think they'll be
very intuitive to you. The first one is called involvement. It's a psychological
term, but
it's often used in marketing. Well, what does involvement mean? It means the mental
energy and the time that you put into
considering a product purchase. Some product purchases we call low
involvement, so it's little time or mental energy expended. That's like a gallon of
milk, right? You go into the store, you need a gallon
of milk, you may look around for a couple of seconds on the shelf. But you probably
have a favorite brand,
or a favorite size, or something. You may glance at the price to
make sure it's not too high or it's about what you expect. But you don't spend a
lot of
time comparing different prices. You don't spend a lot of time
at the point of purchase. A lot of times, what you would do in those purchase
situations is just grab it and go. Compare that to a high involvement
process, something like a car. For a car, you could literally,
in some cases, spend months considering what kind
of car that you're going to buy. You may price shop it, you may go online,
you may check different dealerships, who's charging what for it? You may go to
online rating agencies. You could do a lot of different search and
a lot of comparison for these types of processes and
these types of products, why? Well, one of the reasons is you're
spending a lot of money, so it's worth you spending a lot
of time to consider it. The second is it's a more complex
product than a gallon of milk. So there are more things
to kind of trade off, more kind of underlying
characteristics to consider. So that's what we call involvement. There's something
else I want to discuss,
called consumption visibility, and I think this will be intuitive as well. Some
things we call inconspicuous. That means people don't
see you consume them, or if they do see you consume them,
they don't really pay attention. That's like brushing your teeth,
your toothbrush. Who sees you use your toothbrush? Well, you, maybe a member of
your family. But in general, your coworkers, your friends don't spend a lot of time
watching you brush your teeth, right? So this is just something you generally
consume in the privacy of your own home. And that will impact how you think
about price in this kind of situation. I'm going to get to that momentarily. Other
objects we call conspicuous. What conspicuous means in this
context is people see you use it. I think this person has an iPhone, okay,
or at least, he has a smartphone, right? And you see your coworkers, you see your
friends, you see your family members, you see other people consuming these,
using these devices. And because you see them
using those devices, those devices may become
important to that person because it projects something out
to the world about who they are. In that situation, price is going to
be handled a little bit differently.