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Pricing Compression: Associative Memory Impacts Your Customers’ Perception of Value

pricing compression May 31, 2022

Question. What do you know about apples?
How did you first learn about the concept of the apple? 

People’s brains love associations that enable us to learn new concepts. So, to understand an apple, you connected the idea to something that already existed in your brain, maybe food and the colour red.

This is the process of associative memory - where people attach new concepts to existing information, and their knowledge becomes interconnected. Give your hard-working hippocampus a high-five!

Some connections are powerful and some are weak. This can impact how familiar something feels or how quickly we can recall the information.

In retail research by North & Hargraves (1999), they wanted to understand better how wine purchases are influenced by associations (consciously or subconsciously).

They found that the music in a liquor store directly influenced the way people made purchasing decisions, specifically, what nationality wine customers purchased. 

French music = French wine.

What does this mean for Cannabis? We have customers with various associations, some strong and some weak when shopping for cannabis. 

The familiarity of these associations leaves customers with perceived value and can influence or enable confidence in their purchase decision-making. 

Discounting is inevitable in today’s retail landscape. We know discounting attaches associated memories to either the product or your brand overall. As a retailer or brand, this is something to be aware of.  Are you conditioning your customer to connect the concept of discount with your products? If so, how are you breaking up those patterns of thinking?

Consider these takeaways when thinking about the associative memory impacts on your customer's perception of value:


  1. Think about how this can influence your customers' perception of the brand. The elements associated with your brand will create associations, informing your customer of the value of the product sold in the environment.
  2. Your budtenders need to become masters at identifying your customers' existing information about products. Ask them to start with ‘what’ and ‘fact-based’ questions.
  3. Everything in your environment, including the music, can influence what, how much, and the value of purchases in-store.


  1.  It sounds simple, but all brand elements must exude your brand. If your brand is fun and exciting, it needs to look that way. - Making sure your brand is well defined will keep you on course as you develop ownable material that shines to your target consumer- and influences those connections.
  2. Does your sales team represent the brand at the store level? Meet every one of your regional representatives and ensure they reflect your brand to your standards.

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