Now I know why No Name products at No Frills supermarkets have that damn ugly yellow packaging: it’s all part of the sales strategy to pander to the thrifty consumer while scaring away the better heeled, ego-conscious customers who wouldn’t be caught dead skulking under the bare flourescent lamps of a discount grocery.
Such is the case of the unadvertised small cappucino at Starbucks. The small cap is more authentic (everything in Europe is smaller, go figure. Except for their men. Sorry.), stronger, and cheap. It’s also not listed on the board, because ol’ Bucky wants to keep its well-heeled customers’ eyes on the bigger, pricier Venti size. The Small is to garner business from the pennysaver. (At least according to “dismal science” writer Tim Harford; baristas posted on Slate’s message board argue otherwise. They to point out that the fault lies not in the Starbucks but in ourselves: for North Americans, bigger means better, traditions be damned, and they want a calorie-ladened Venti overdosed on sugar and milk.)
Whether the Caffeine Mermaid pricing conspiracy amounts to a hill of beans or not, the economic theory is sound. I remember a clever article written by Joel Spolsky on software pricing. Ever wonder why Windows XP comes in two virtually indistinguishable flavours, other than the “Professional” version is 33% more? Now you know.