"The Consumer's Hierarchy of Preferences: Two Ends of the Strategy Spectrum" and "What Makes You Happy" both discuss the importance of creating positive associations and contrasts in order to satisfy consumer needs and bring happiness.

"The Consumer's Hierarchy of Preferences: Two Ends of the Strategy Spectrum" and "What Makes You Happy" both discuss the importance of creating positive associations and contrasts in order to satisfy consumer needs and bring happiness.

In "The Consumer's Hierarchy of Preferences," two strategies are discussed. The first strategy focuses on building a brand and charging a premium price. This is achieved by creating a positive valence towards a product through association. Retailers use advertising to associate their brand with things that consumers feel good about, such as Coca-Cola's ads of smiling people holding their soft drink. This not only sells the product but also sells a feeling or experience that cannot be easily replicated by competitors.

The second strategy is focused on increasing volumes rather than price. Retailers aim to decrease costs as much as possible in order to pass on the savings to consumers and stimulate demand. These retailers prioritize cost efficiency and often position their brand in terms of consumer value, emphasizing low prices in their marketing. By meeting more conditions on a consumer's hierarchy of preferences, retailers can increase consumer surplus and create loyal customers with a unique value proposition.

Both strategies emphasize the importance of consistency with the brand. A business must ensure that all aspects of its operations align with its value proposition in order to avoid brand dilution. Coach's decision to introduce lower-priced products and distribute them through outlet channels led to a degradation of their luxury brand. Building back a damaged brand is challenging, highlighting the need to protect and maintain a strong brand identity.

The concept of consumer surplus is also discussed. Leaving some consumer surplus instead of extracting it all allows a retailer to be in a better competitive position. Private equity companies have historically extracted consumer surplus by raising prices and cutting services. However, this approach may lead to lower expected company longevity. By strategically leaving some consumer surplus, retailers can maintain a competitive edge and create a positive consumer experience.

In "What Makes You Happy," the article explores the idea that happiness is derived from contrasts between current circumstances and previous experiences. The best drink, food, massage, and sleep are all experienced when there is a contrast in circumstances. It is the contrast, not the amount, that brings happiness. However, happiness is a fleeting emotion as individuals quickly adapt to new circumstances.

The article emphasizes the power of expectations in influencing happiness. By keeping expectations low, individuals can focus on appreciating and finding joy in the contrasts between reality and expectations. Happiness, contentment, and joy stem from experiencing a gap between expectations and reality.

Combining these two concepts, we can draw actionable advice for retailers and individuals alike:

1. For retailers: Focus on creating positive associations and a consistent value proposition. Building a strong brand that evokes positive feelings in consumers can lead to brand loyalty and the ability to charge premium prices. Maintaining consistency in all aspects of the business operations is crucial to avoid brand dilution and protect the brand's value.

2. For retailers: Consider leaving some consumer surplus instead of extracting it all. By offering value to consumers beyond their expectations, retailers can gain a competitive edge and create a positive consumer experience. This can lead to increased customer loyalty and long-term success.

3. For individuals: Manage expectations and appreciate contrasts. Recognize the power of expectations in influencing happiness and strive to keep them low. Find joy in the contrasts between current circumstances and previous experiences, focusing on appreciating the gaps between expectations and reality.

In conclusion, both "The Consumer's Hierarchy of Preferences: Two Ends of the Strategy Spectrum" and "What Makes You Happy" highlight the importance of creating positive associations, maintaining consistency with brand values, and appreciating contrasts in order to satisfy consumer needs and bring happiness. By implementing these strategies, retailers can create loyal customers with a unique value proposition, while individuals can find joy in the gaps between expectations and reality.