Sunday, August 12, 2012

Impulsive, Irrational Pricing!

Do you see what I see??

No?? Got an eye problem?? 
Go back to the image again. Stare at it, PLEASE!!!
Do you see it now??
Well, this is what I see:

What I see is a brilliant, amazing implementation of irrational pricing

Look at the top of the menu where a 7" Margherita costs Rs. 75.

If you go for the 10" Margherita, it costs Rs. 170!!


Technically, a 10 inch pizza in size is 43 % more than the 7 inch pizza.

But cost-wise, Rs. 170 is 126% more than Rs. 75 !!!!

In fact, if I buy 2 Domino's pizzas of 7 inches each, I get 14 inches of pizza and pay Rs. 150; but I need to pay Rs. 170 to get only 10 inches!!

Look further - If I buy 3 pizzas of 7 inches each, I get 21 inches to enjoy and pay Rs. 225; whereas 13 inches as a single pizza costs me Rs. 315!!!


This proves that:

- Consumers are completely irrational when it comes to making pricing decisions when they see choices.

- They choose the size they want, not the price.

- Then, they just 'accept' the price presented to them!


- Create a 'need based' pricing matrix - not a volume or input based pricing structure. Notice how the Inches (") printed, is the smallest font on the menu!

- By presenting lots of variations and choices, the human mind migrates to what it wants. It does not look at alternative options when one choice seems logical:

To elaborate - if the 2 of us are eating a pizza, we may call for a medium pizza and share it.

Instead, we should call for 2 separate pizzas and also give away a few extra inches to some friends!

We would've saved money and made someone happy too!

- Don't get too scientific about pricing. Get fuzzy, irrational and emotional. It works!!!