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750 ML bottle of Highland Spring: 69 pence
1.5 L bottle of Highland Spring: 58 pence
Where are the Economists now?
Through hocus pocus is how they make money :) You made me smile there.
Most probably 1.5 L has lower demand hence lower price.
750 ml is more popular, hence higher price.
Many times if you compare the price per 100gm of things like ketchup, mayonaise etc then the smaller pack is better value than the larger one which means it is often cheaper to but 2 x 750ml bottles than 1 x 1.5L bottle.
In this case if I really wanted to buy a small quantity of fizzy water I would pay 58p for the large bottle then throw half away.
Just went to a major supermarket.750 ML bottle of Highland Spring: 69 pence
1.5 L bottle of Highland Spring: 58 pence
Skeptic's economic theory:
Buy one 750 ML bottle - do not throw away container after consuming contents.
Subsequently buy only 1.5 L bottles and use them to refill your saved 750 ML container.
Also, it could be a mis-labeled price.
Was this an everyday price or a special discount on the larger size?
Well - to be honest, I was in the sandwich section and looked at the price of water (small bottles) and thought "that's crazy" so I went to the "i'm a mum with a weekly shopping" isle. Hey presto - there was the rip off for all to see.
So - it happened because the supermarket knows all too well that the blokes going in for a sandwich and drink at lunch time aren't half as savvy as the mums doing the weekly shop.
All to do with marketing - zero to do with Economics.
Actually - whilst I'm ranting, another chain keeps on saying "have you got a 'Spend and Save' card, sir?"
Well that's a contradiction in terms I must say!
And to think webmasters coined the term Black Hat. We know nothing :)
Extensive blind-testing shows that most people cannot tell the difference in taste between tap water and bottled water. So the insanity is in the prices of both bottles. ;)
All to do with marketing - zero to do with Economics.
Exactly!
I'm not indignant or self-righteous on the subject, but rather just baffled... It seems such a waste, really. Absolutely brilliant marketing, though -- Almost like convincing people to buy bottled (but plain) air.
Jim
Can anyone spell Evian backwards?
I've been mulling selling freeze dried water, that way the shipping costs are minimized. Just add water.
So - it happened because the supermarket knows all too well that the blokes going in for a sandwich and drink at lunch time aren't half as savvy as the mums doing the weekly shop.All to do with marketing - zero to do with Economics.
This would definitely be discussed in economics... maybe just not intro type classes. Maybe it would be discussed in behavioral econ.
Looks like market segmentation to me, the theory being that you can extract more "consumer surplus" by dividing groups and pricing according to those groups. These groups happen to be divided by where they are in the store and what they are there for. The classic example of this sort of pricing behavior is senior citizen discounts.
Seems like a pretty extreme and unlikely case, though. Given the technology supermarkets are working with now, they either already know it's working out for them or they'll know soon. At least with large supermarket chains, they can plot pretty accurate information in a short period of time, without a large cost to do it.
