I HAD to kill time and let go of the maddening rush hour on a Friday mayhem payday after a hectic, one full day teaching young minds on how to become effective training managers in a not-so distant future. So I rushed to the nearest Starbucks for a quick coffee jelly fix. After all, I got too many of those P150 discount coupons as a result of my being a diehard patron of BPI credit cards.
The small cup of coffee jelly costs P165, and so I’ve to fork out P15 in addition to BPI’s P150 discount. No worries. But after visiting Starbucks for countless of times, it was then I realized that an upsize coffee jelly costs only P175. The credit goes to an energetic young woman crew whose name sounds like she’s from the entertainment industry aptly doing persuasive and suggestive selling.
“Sir, would you like to consider having the next upsize instead? The difference is only P10,” says the amiable young lady in her green apron.
I happen to be a big fan of coffee jelly since 1993 when I studied a yearlong Japanese management fellowship in Tokyo under a grant of then Nippon International Cooperation Center, now merged with Japan Business Federation. That was the time when coffee jelly became ubiquitous along with the adult manga at 7-Eleven and Family Mart in every street corner of Shibuya.
So, when the suggestive seller articulated that I consider an upsize cup at P175, instead of P165, I smiled and enthusiastically said “No” laced with a hint of expertise of an alert, stingy customer.
I was afraid that the potency of P175 cup could be harmful to my sleeping pattern. But no, the real reason was this: I’m already a senior citizen and I did not get this far to be hoodwinked by a subtle marketing promo.
Now, that I’m here in the comforts of my home writing this piece, I’m beginning to ask the question: What if Starbucks review its pricing scheme so much so that the price becomes negligible, say at P5 difference per cup? Would I be attracted to the upsize cup?
Probably, my answer would be in the affirmative. The trouble, though, is that Starbucks will not do it. There’s a psychology into all of these things. And it’s called “relativity” – the term used by Dan Ariely when he explained why The Economist – a popular publication that we in business would like to read, is being priced in a manipulative manner. Take it from Ariely’s New York Times 2008 bestseller “Predictably Irrational.”
For a one-year subscription of The Economist, you have three options to choose from: One is $59 for online access to all articles. Two is $125 for the print edition. And three is $125 for print and online subscription to all articles published since 1997.
Other than being “manipulative,” it’s called “relativity” by Ariely because “we focus on the relative advantage of one thing over another, and estimate value accordingly.” That was the subscription scheme of The Economist before – circa 2007-2008. How about today (2016)?
I checked the Internet for some clues and got the modified offering in pesos, because the prospective subscriber (yours truly) is based in the Philippines:
Instead of the usual one-year subscription offering, “The Economist” is now being sold for 12 weeks (more than two months) to meet the Filipino’s penchant for tingi (sachet) economic mentality: One “digital” option for P3,500 includes full access to economist.com, audio version, apps, and The Economist Espresso. The second option — “print plus digital” costs P3,810 for the print copy, full access to economist.com, audio, app, and The Economist Espresso. Now compare this with the third option of only “print” edition for P3,175. Now, which one would you choose?
One thing that strikes me is “The Economist Espresso.” What kind of animal is it? Simply, it is a collection of latest news and stories that you’ll receive first thing in the morning in your smartphone.
Are we being manipulated here? Maybe, yes. Now, how do we get back? At least, I know how to get back. I can use the facility of our school library to read the digital and print copy of all the business news and articles from around the world.
How about you – ordinary mortal? I’ve one practical advice. Go to the most expensive hotel or restaurant that you can find and order the cheapest meal on the menu.
Rey Elbo is a business consultant specializing in human resources and total quality management as a fused interest. Send feedback to email@example.com or follow him on Facebook, LinkedIn, or Twitter for his random management thoughts.