Spend, Save and Invest Smartly
How many of us are caught up by the good looks of celebrities and the fashion trends they set? Some of the top brands in the world are endorsed by celebrities. Brad Pitt endorses Gucci. David Beckham endorses Mark and Spencer’s. Fashion products Avon and Revlon are endorsed by Salma Hayek. Our very own Aishwarya Rai endorses L’Oreal a cosmetic and beauty product. Don’t we all get fascinated by these products endorsed and want to purchase them? Everyone wants to purchase the best products but can you afford them? Clearly the days are past in which one only looked at the glamour quotient but now one also looks at the price tag I would like to remind all of you that the team of financial planners at Moneymindz.com are always there for you to plan your financial needs in an efficient manner. You can explore this unique Free Advisory Service just by giving a missed call at 022 6211 6588.
In this age of credit card shopping, people would regard me as a fool for even daring to make such a suggestion. Every advertisement says "Just Swipe That Card". However the rule here is plain and simple. Shop for all those nice clothes only with cash .Here if you don’t have cash postpone your purchases till the time you are able to afford them. It would do you a world of good to remember the famous proverb "There Is No Poverty Like Debt".
You must have seen "50% Off On The Purchase Of This Garment”. Do Not Miss This End Of Season Sale". Buy One Get One Free. How many times have we been lured by these kinds of marketing tactics?. Here the word free has a psychological effect on our mind. All products have their upsides and downsides, but when we hear the word free we tend to ignore all the negatives and the downsides in the product. Would you mind standing in a queue for that free ice cream? Let us imagine that a particular brand of clothing costs INR 500 and another brand costs INR 1000 but is of higher quality .However the brand which costs INR 500 offers a buy one get one free package. Which One Would You Choose?.
Let us consider the following example to understand what is double discounting. Here you go to a shop and find a pant offering 20% discount and an additional 25% discount. In the same store you find another pant with a 40% discount offer. Which one would you purchase? Most of us would choose the double discount offer because we perceive that 20% and an additional 25% is 45% .But is this calculation accurate. Here 20% on INR 1000 is INR 800.An additional 25% discount on INR 800 is INR 600.Here the pant costs us INR 600.Similarly 40% discount on INR 1000 translates to be INR 600.Here clearly both the pants costs the same sum of money.
When you enter a store you find 2 cargo shorts placed next to each other. One costs INR 499 and the other costs INR 799. Many people fall for this trick or the decoy effect and purchase the lower priced cargo shorts. However this cargo short may be overpriced but when seen in context of the higher priced cargo shorts looks a good deal.
Here we have an offer get 30% discount on purchase of this detergent cake. Another detergent cake has an offer get 30% extra on purchase of this detergent cake. Which product would you choose? .Obviously 30% extra. Here the Get More For less factor works in favor of this purchase. Here the word extra plays its role on the subconscious part of our mind. Here the discounted product might be priced in a better way but numerical blindness clouds our senses.
Here we have heard of limited quantities of products available for limited time periods. Rush and make use of this offer. This offer is valid only till stocks last. This is a marketing tactic done mainly to persuade you to speed up on that purchase. Time is precious. What are you waiting for? Make that purchase right now? How many times have we been fooled by such advertisements? Made the wrong purchases when we didn’t really need them?. Did we use up our retirement funds on that mobile phone or on that designer sportswear?.Sometimes the products are genuine and do get over within a limited time frame. However many times this is just a marketing gimmick.
Many times you must have seen advertisements. Drink so and so products and you will be able to hit a six like some famous cricketer. You want smooth and silky hair like some famous model .Use this shampoo. Drink this energy drink and you will be able to score a goal from any position .Use this deodorant or shaving lotion and all the girls on the dance floor will fall for you .How many times have we seen these advertisements and fallen for them just because they were endorsed by our super heroes? Recently we must have seen an advertisement is which a prominent cricketer posed as a God and endorsed a number of products. He became the God Of All Deals..But aren’t we partially responsible for such controversies .In India we have a culture of keeping cricketers on a huge pedestal and worshiping them. How many times have we heard that cricket is our religion and this cricketer is our God? Is it wrong then to expect them not to start behaving like Gods? It is good to remember that cricketers are also businessmen and have their ad commitments. They get paid heavily to endorse products. They have a limited shelf life and have to make the best use of the deals they get. Isn’t it up to us to use our discretion while making such purchases rather than blindly follow our emotions?
This is a tactic practiced by the fairer sex. Here you mainly appeal to the humanity of the shop keeper in order to obtain that dream bargain. Many of the shop keepers feel embarrassed by this tactic in India and it is known to work. On a lighter note I always hold my wife’s hand when I go to the mall. If I let go she Shops.
Walk calmly into that store .Mark the product you want and quote a price .If the salesman does not offer you the price you want calmly walk out. Chances are the salesman will call you back and give you the product you wanted particularly if there are many stores selling the same product in that location." Whoever says Money Doesn’t Buy Happiness Has Never Gone Shopping ".
A Greedy salesman might quote an INR 500 product at INR 800.We need to be unreasonable and state that we will purchase the product only for INR 200.This attitude of ours will bring him back to earth. Here it is very essential that you know the price of the product in the market and an idea of the true price of the product. On a lighter note " The Odds Of Entering A Mall To Buy A Loaf Of Bread And Coming Out With A Loaf Of Bread Are Pretty Slim ".
You enter a store and notice a good pair of shoes which interests you. You appear disinterested and mention to the salesman your fear of being cheated and your disinterest in striking a bargain. Here this might not look like an effective tactic but by laying ones cards on the table and taking the bargaining option out, you might just get what you want.
In India there was a dearth of quality products being marketed and sold online at the right price. In recent years the number of people especially youth surf the net and online retail portals, to obtain quality products at discounted prices. Wherever there is demand always an innovation takes place in order to supply or fulfill that demand. In this case an Indian NRI noticed this demand and a website was launched catering to good quality products and luxurious products at discounted prices. A very high quality watch costing around INR 2 Lakhs was sold at INR 1.5 Lakhs This happened to be one of their costlier products. This e-commerce industry is in the nascent phase and has yet to catch up to the needs of the younger generation. Most of the youth research online and make their purchases in real brick and mortar stores. Most of the luxury brands do not have an online presence for their high end goods and clearly do not want to sell them at a discount. However times are changing and even big luxury players have entered the online space. This is a sector poised to boom in the future with the development in technology and launching of an e-commerce platform .In future in India we would see the growth of online e-commerce systems which facilitate online purchase payment methods through EMI, Development of technologies like near field communication which makes your smart phone maybe your future shopping platform. We would have a wide variety of products priced in different ranges along with luxury goods at discounted prices. This is clearly a thought for the future.