Squirrel Spotting: Price Has Nothing to Do With Value

(nationaljeweler.com) - Ernest Beaux was a perfumer of some renown, having created the fragrance that became Chanel No. 5. According to biographer Tilar J. Mazzeo, author of “The Secret of Chanel No. 5,” when Beaux was experimenting with different ingredients in the process of creating the fragrance, he added generous amounts of jasmine from the perfume capital of Grasse in the South of France. In doing so, Beaux felt it necessary to warn Coco Chanel that a perfume with so much jasmine would be “fabulously expensive,”  to which she reportedly replied, “In that case, add even more.” Chanel’s exhortation to effectively add more cost to the fragrance was uttered in 1920, decades before we would come to understand the effects of pricing psychology on consumer behavior. Her statement foreshadowed the 2021 words of Shankar Vedantam, who wrote “If you want to heighten people’s expectation of a product, just raise its price,” in his book “Useful Delusions: The Power & Paradox of the Self-Deceiving Brain.”