Same Product, Same Price, Different Expression & Results

Feb 24, 2014

Whenever possible I try and take my kids to the St. Lawrence Market (chosen by National Geographic as the world’s best food market) each Saturday morning. It's something I used to do with my dad, and it is a great chance to shop small, (mostly) local and support some really hardworking independent businesses.

I'm loyal to one particular butcher and have been for almost twenty years. They sell ribs (beef and pork), usually by the pound, occasionally by the rack. I almost never buy them by the pound, but I can almost never resist them when they are sold by the rack.

When I thought about I decided there were a couple of things going on in my head. The first was that the per-pound pricing model drew attention to how much of what I was paying for was really going straight into the garbage. It made me feel like I was paying to just throw something away. The other thing is that there is a disconnect between the price and the product - you can specify how much ground beef you want in terms of pounds, but you buy ribs by the rack, and I have no idea how many pounds a rack of ribs weighs. The end result is that I was far more attracted to the per-rack pricing model.

I've since learned I'm in the minority. Apparently more people are drawn to a lower expressed price. Since the per-pound price is always lower than the per-rack price it makes more sense for the vendor to display the per-pound price that appeals to more shoppers.

This week I had committed to making ribs for some friends but they were only being sold at the per-pound price. I had no choice but to buy them anyway.

I was surprised and a little embarrassed when the price for four racks, charged by the pound, was just over forty dollars. It was just pennies more than I would have paid at the per-rack price I always assumed was a much better deal.

I asked the butcher about it (after 20 years we're quite friendly) and he explained that there was no great science to it. He had learned through experience that he generally sold more ribs at the per-pound price, but if it didn't seem like they were moving, he would switch to the per-rack pricing model and usually increase sales for a week or two.

He was approaching it like a fisherman that sticks with a favorite lure or bait as long as it produces, then switches to something else as soon as it stops. He was using different pricing models to activate different customers.

There is some more detailed information on the Beyond Cost Plus site: Same Product, Same Price, Different Pricing Model

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