Saturday, May 23, 2009

Price it right

In marketing, pricing is of vital importance. There are a lot of subtle cues that people look for or use in determining the product to buy. For example, I saw a soap solution that was priced at Rs 40 for 125 ml. The same soap solution was priced at Rs 80 for 250 ml. If the customer has no real need for 250 ml of the soap solution, there is no way he is going to buy the 250 ml version. If it was priced at Rs 45 for 125 ml or say Rs 75 for 250 ml, you are throwing a challenge to the customer and the customer may end up buying the 250 ml version. It is an incentive to the customer to buy more by offering an implied discount.

A more counter-productive pricing example I witnessed was for a custom drink here at Coimbatore (ஜிகர்தண்டா - 'jigarthanda' you must taste it - it is an almond based drink that is extremely refreshing). 150 ml was priced at 15 Rs while 200 ml was priced at 25 Rs. The first case, the unit price for 50 ml of the drink is Rs 5, while in the latter case it is Rs 6.25. Why would a customer pay more price when he is buying larger quantity?

5 comments:

Ramsi said...

though counter-productive in the business perspective, it is good for individuals. The so called productive pricing has made America obese.
btw..is jigarthanda same as falooda. The other day a friend was arguing that they are the same.

Deepak said...

I don't think the business gets to decide that anyway.

No they're not the same!

Raji said...

jigiruthandaa is actually from mdaurai...am i right? ram can u say something

Deepak said...

Yes maam, originally from Madurai,now quite famous at CBE too!

Raji said...

jigiruthandaa is actually from mdaurai...am i right? ram can u say something

 
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