Final answer:
When a customer perceives a product as being too expensive, it is often because they associate the price with the product's quality. This is known as the price-quality relationship. However, the price is not always an accurate indicator of quality.
Step-by-step explanation:
When a customer perceives a product or service as being too expensive, it is often because they believe the price is an indicator of the quality of the product. This is known as the price-quality relationship. For example, if a customer sees a set of stamps priced high, they may assume that the stamps are of higher quality even if they are not familiar with stamps. This perception is similar to how people assume that expensive restaurants serve better food or that higher-priced clothes are more stylish.
However, it is important to note that the price-quality relationship is not always accurate. Sometimes, products may be priced higher due to factors such as branding, packaging, or marketing costs rather than actual quality. It is crucial for customers to evaluate other factors such as brand reputation, reviews, and specifications before making a purchasing decision solely based on price.
Example: A customer might be interested in a set of stamps priced at $100. They might feel that the price is too expensive for stamps and question the quality. However, it is possible that the price reflects factors like limited edition, rarity, or collectible value rather than stamp quality.