Post No.: 0036
If you don’t have the faintest idea how something is made or what really goes into making and marketing it then you can end up paying way over the odds when you come to buy it.
A product designer knows what really goes into designing and manufacturing a product so knows the true or fair price one should really pay for a product. A cook knows what really goes into making a dish so knows the true or fair price one should really pay for a dish. Someone who knows how something works knows what’s mere guff just to charge customers more and what’s really important in the function of a product. A pharmacist knows what’s mere guff just to charge customers more and what are the true active ingredients when it comes to medicines. A chef in an expensive restaurant knows what’s mere guff just to charge customers more and what’s really important in good food (and the latter is what a chef tends to serve her/himself and her/his own family at home or after work). A person who knows little on the other hand is at the mercy of marketing hype, sales patter and paying far more than what something is really intrinsically worth.
By learning how things really work, or by even learning how to make something oneself, one can better see through any marketing bull****. Even learning more about specific industries, businesses and their brands can help you decide if you’re about to pay a premium (over the expected value) for something (e.g. some products, made in the exact same factory and in the exact same way, sell at different prices simply depending on what label/brand they attach to their external packaging at the end). Knowledge protects you from salespeople trying to upsell you stuff you highly likely won’t need too.
I suppose it’s up to you how you want to feel about it e.g. you can either think ‘wow, I’ve just bought myself an expensive item of clothing and that makes me feel great because I’m worth it’ or ‘oh dear, I’ve just been had by the marketing and I could’ve bought essentially the same thing but at a better price elsewhere’. We each assign different values and thus prices for different skills, labour and materials, and most of all vastly different emotional values on things. Some may argue these emotional values are irrational but we’re not robots.
Whatever the case, don’t assume a firm’s interests are ever perfectly aligned with their customers because there’s always at least one misalignment – in exchange for a good or service, the firm wants to extract the most money they can from the customer, and the customer should rationally want to pay the least money they can to the firm! And clever marketing is one way a firm tries to extract more money from its customers – by trying to make a product seem more valuable than it really intrinsically is (via methods such as hype, buzz, associations with certain celebrities and their perceived attributes, selected imagery associated with desired traits, fear, sex, scarcity or time pressures and many more).
A perfectly self-optimising free market assumes that all customers have perfect information and are perfectly rational actors (amongst one or two other well-criticised assumptions) – perfect information and perfect human rationality are both unrealistic and empirically untrue – and indeed real-world firms don’t want consumers to have perfect information because they precisely want to exploit an information asymmetry, a lack of full transparency, so that they can charge more for their products than what they really should be worth (e.g. diamonds aren’t as rare as you may think – their supply was only recently and for a long time controlled and restricted by a monopoly cartel that kept prices vastly artificially higher than they should’ve been. Even today, the diamond industry is hardly a perfect competition environment – although this is true of any other industry you can think of in the real world). Commercial adverts and marketing generally only express the things the seller wants us to know but not the things they don’t want us to know (to varying degrees depending on the advertising regulations present).
But you can do your own best to make sure you don’t get duped or needlessly waste your hard-earned money, or to at least win more than you lose in the long-run. Knowledge is power! Meow!
Knowledge is not just about protecting yourself from being exploited by businesses. When, for example, you gradually learn more about your central heating system (with the help of information you can find online) then you can save yourself from paying a call-out charge for someone to simply tell you that’s it’s something wrong with your thermostat receiver; and if you know how to solder stuff then you can save yourself from paying to replace the entire unit when you can just pay a few quid to replace the relay component on the circuit board. It’s better for the environment too to replace only exactly what’s broken rather than what’s not. Of course it’s important to learn about safety first when doing or trying some things e.g. how to switch off your electricity at the main panel and double-check with a voltage detector to run some diagnostics. (This is a real-life example of mine and it saved me a lot of money, as well as saved my fluffy futtocks from freezing one frigid fall! If it didn’t work then I would’ve hired a professional but I gave it a go and it worked.) You can then potentially help your friends too to save them money if they experience a similar problem. Another useful thing to therefore learn is basic first aid, and maybe some basic wilderness survival skills too – not to save money but to save lives.
At the time of posting at least, Furrywisepuppy and I are not trying to sell you anything so we have no problem talking down firms or even entire industries (or anything or anyone else for that matter) if there is possibly a worthwhile piece of knowledge to be passed onto our furry and fluffy readers. (And even if things might change in the future, we will not support or endorse anything that we wouldn’t trust or want to buy ourselves. You, our readers, come way before anything else! <3)
Meow. I know what goes into my food because I love to cook even though I don’t need to eat cooked food – but I am a very fussy kitten when it comes to what I will eat. I wonder what I’ll have tonight… trevally or sea bass?