Second Cheapest Syndrome
Ever order the second cheapest wine on the menu while dining out? Well, one in four diners do (in the UK, at least). In the marketing world, we can define this as a choice set effect with respect to reference pricing - using the cheapest bottle of wine as a standard of comparison against which the other wines are compared.
But did you know that the second cheapest bottle is usually the worst value?
“Restaurant owners will often price the wine they buy cheapest at wholesale as the second cheapest wine on the menu. Why? Because people generally don’t order the cheapest wine and thus often turn to the second cheapest. Price that one higher, and you get a bigger marginal profit. Presto — restauranteur as microeconomist!” (from a reference to an old WSJ article I can’t locate online)
Notes
-
whats-on-in-brighton liked this
-
superamit reblogged this from ahref
-
onesong reblogged this from dihard
-
jeffmiller reblogged this from dihard
-
portableland reblogged this from dihard and added:
Learned Today: Second Cheapest Syndrome
-
thisispartofthewhole reblogged this from dihard
-
vikax reblogged this from dihard
-
siddman reblogged this from asprettyasasong
-
jessiecarter reblogged this from kellyreeves
-
kellyreeves reblogged this from nickdouglas
-
asprettyasasong reblogged this from dihard
-
brocatus reblogged this from dihard and added:
Interesting idea; what would be...freelance/ design equivalent?
-
ahref reblogged this from dihard
-
jja reblogged this from dihard
-
caughtupinsanity reblogged this from dihard and added:
have done this before.dihard:
-
nickdouglas reblogged this from dihard
-
uicukie reblogged this from dihard and added:
interesting fact, though I always...or whatever sounds good. But mostly
-
jjk reblogged this from dihard and added:
totally fall for this every time…
-
karion reblogged this from dihard and added:
Absolute truth. If my experience waiting tables...fine dining places is any guide,
-
youreatowel reblogged this from dihard and added:
would this also apply to...most expensive? i typically choose either
-
dihard posted this
