Everyone Does It

Here is an interesting article from the BBC regarding the best products or the best values being hidden.

Basically, a company (Starbucks in this article) has a value item that is regularly available, but is not on the menu. They don’t ost this item on the menu in hopes that you will order something more expensive, but if you already know this item exists, they will serve it to you. They don’t want you going accross the street.

Another spin on this is the Big Box trend.

Take the example of a stationary store. This store carries XYZ’s product at a retail price of $5. What customers already know is that Target probably has a similar product also made by XYZ for $3. Usually it is XYZ’s goal as a manufacturer to keep selling to Target (obviously) and also sell to the small stationary store.

What isn’t apparent on the surface is that the product in Target and the stationary store is usually exactly the same. The only difference is the packaging. The stationary store doesn’t want its customers pissed when they see the same product at Target for half the price so XYZ just changes the package. This usually keeps everyone happy, but people are learning quickly.

This is a tricky problem, because no one really wants to spend more money on the same product, and at the same time we can’t have Target and Walmart being the only retailers in America. This is the best answer for now. Hopefully someone out there is working on a better solution.

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