Jan 15, 2006

I'll take 14

Clinic Plus, H&S and Pantene are available in small pouches of 7.5 ml. (i.e. 14
packets will give you 105 ml of shampoo)
CP: 1.5 x 14 = 21
H&S: 3 x 14 = 42
Pantene: 3 x 14 = 42
Their 100ml bottles are priced (as on Jan 14, 2006) as follows:
Clinic Plus: 33
H&S: 64
Pantene: 51

It is unusual to see such prices because in a normally one expects to pay a lesser per-unit price when the quantity increases. Packaging cost can not justify the higher price (a 100ml plastic bottle costing Rs. 12 or 22! NO.).

One reason could be that the companies selling these things might be cross-subsidising the smaller pouches by bottles. Somewhat like the Railways does (or at least claim to do) with passenger and goods tariffs.

Another reason could be that the companies deliberately price the bottles higher based on some statistical information that they possess in the form of slick PowerPoint presentations. The data basically tells them "your average bottle-customer has an average income of Rs X and he/she would not mind paying Rs. Y for your shampoo."

This complex art of maximizing profits without affecting sales is called pricing. In certain other situations like the auto/taxi drivers charging extra money to tourists it is known as duping or even robbery.

So when next time you pick up that bottle of shampoo from your friendly neighbourhood supermarket, remember you are helping some poor chap buy a 7.5 ml shampoo at an affordable price or you are being ...

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