Check out this Domino’s menu (Peddar Road, Mumbai):
No?? Got an eye problem?? ( I was told this is RUDE!! )
Go back to the image again. Stare at it, PLEASE!!!
Do you see it now??
Well, this is what I see:
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!!
Huh??
(Oh, the Strikeouts represent a mistake in my calculations). See the note and the end of the post.
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!!!
WOW!!
This proves that:
– Consumers are completely irrational when it comes to making pricing decisions when they see choices.
– The choose the size they want, not the price.
– Then, they just ‘accept’ the price presented to them!
Lessons:
– 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!!!
Hope I have whetted your brain’s appetite!!
********
Correction and additional note
So, I erred when I assumed that the Pizza size as 7″ without considering the area of a pizza and how its size should really be calculated.
I was STUPID, SILLY, AN IGNORAMUS and got beaten to death on facebook 🙁
Having said that, I calculated the ‘cost per pizza inch’ of all the sizes and all the varieties, and guess what??!!
The pricing is DEFINITELY Irrational, but may not be wildly so.
In the case of the Veg. pizzas, the cost goes UP as you buy larger sizes, whereas in the case of the Non. Veg pizzas, the cost comes DOWN (for bigger sizes)…
