It is interesting to separate consumer from business when looking at this theory.
Prof Baba Shiv is a Neuroeconomist from Stanford, and has been looking at the neurological effects of "emotional attraction" to a product.
His current thinking (as of Nov last year at least) was that a positive emotional response to a product has a multiplier effect on the premium that we will place on that product. Thus, if a product can get an irrational emotional positive response (through how it looks, feels, makes us feel connected or cool, etc.), then this needs to be taken into the mix when discussing relative positioning. As mentioned - it is way more than the mere product specifications.
I wonder how long this effect lasts. I suspect that over time people feel less that the product makes them feel cool and move on to a different type of product to get the emotional positive feeling from.
The other side of the coin is perhaps post-rationalisation, trying to justify to yourself why you spent the extra money in the first place re-enforcing your initial irrationality further, and making the whole effect last longer?
Prof Baba Shiv is a Neuroeconomist from Stanford, and has been looking at the neurological effects of "emotional attraction" to a product.
His current thinking (as of Nov last year at least) was that a positive emotional response to a product has a multiplier effect on the premium that we will place on that product. Thus, if a product can get an irrational emotional positive response (through how it looks, feels, makes us feel connected or cool, etc.), then this needs to be taken into the mix when discussing relative positioning. As mentioned - it is way more than the mere product specifications.