Free Sample: Price Discrimination
An excerpt from Tim Harford's new book.
In the supermarkets, we see the same trick: products that seem to be packaged for the express purpose of conveying awful quality. Supermarkets will often produce an own-brand “value” range, displaying crude designs that don’t vary whether the product is lemonade or bread or baked beans. It wouldn’t cost much to hire a good designer and print more attractive logos. But that would defeat the object: the packaging is carefully designed to put off customers who are willing to pay more. Even customers who would be willing to pay five times as much for a bottle of lemonade will buy the bargain product unless the supermarket makes some effort to discourage them. So, like the lack of tables in standard-class railway carriages and the uncomfortable seats in airport lounges, the ugly packaging of “value” products is designed to make sure that snooty customers self-target price increases on themselves.
As in other contexts, it's hard to cheat an honest, unpretentious person. On the other hand, we like those artistic sketched-fruit labels, on the cunningly-shaped jam jars. And they're only a dollar more.
Via The Fly Bottle.
