I stopped to buy gas at the Valero (which I always think is supposed to be Vaquero) and also picked up a drink before making my next stop for work yesterday. I, probably like you, usually pick up a 20 oz drink because it's easy and normal. When I tried to buy a 20 oz Dr Pepper for $1.29, the girl at the counter offered a 1-liter (33 oz) for $1.11. Knowing I didn't need that much I decided that I would get a 12 oz can, but then the counter-girl countered that after tax that can is $1 (or at least very close) and I relented and paid $1.21 for 33 oz of Dr Pepper. For those of you scoring at home, I essentially paid $1 for the first 12 oz and $0.01 each for the remaining 21 oz.
Here's what I think I learned for $0.21 that I probably wouldn't have noticed otherwise. The company (I'll be generic since I don't know which company is most instrumental in determining the price) is more concerned that you buy a unit of product (I'll be generic here too, since most soft drinks are priced this way) than how much product is in that unit. Likewise, you and I are more concerned with consuming a unit of product on the scale of our desire more than matching up individual preferences to fit the scale of our budget. We, and the company knows this, will make decisions to purchase more because of ease and habit (plastic, screw-top is better than aluminum can, and who really needs 33 oz?) than small fluctuations in price. In specific terms, this product has some level of inelasticity, since price (along a small scale) has little to do with our decision to purchase the product.
Also, and maybe more importantly, the product is in some manner of speaking worthless. The first 12 oz I bought cost $.083 each, but the remaining 21 oz cost only $0.01 each. How much we buy doesn't matter, so long as we buy. This also means that how much we buy doesn't affect the cost in any appreciable way. It seems to me then, that the cost of producing this product is all in marketing and delivering this product and not in the product itself.
Did I gladly buy nothing yesterday?
3 comments:
Most importantly, since soft drinks do nothing to satiate your thirst beyond being wet high in sodium, you were really buying "perception of comfort in a bottle" ~ You do need at least 33 Oz of perceived comfort to make a difference, ya know!
yeah, but soft drinks have the perfect caffeine/sugar/coldness balance to make a great "depressant" chaser to a good starbucks latte.
Drink more water.
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