The Decoy Effect

You confuse “marketing,” which means “strategy to promote,” with “selling,” which means “getting the customer’s money.”

Marketing, advertising and selling are three separate, but related, concerns. I know we’re on the internet, but let’s still acknowledge that language matters.

I was aware of it. I did not know it had a name. I don't believe I fall victim to it because I'm so old I can still do at least a little mental arithmetic.

I was also aware of it. Think I saw a bit on QI about this and other pricing tricks.

In the UK, we price things at, say, £4.99. (It'd more commonly be $4.95 in the USA, right? Same trick, in any case.) And this is partly to make it more difficult for a till operator to pocket the money rather than running it through the till -- but it also has a psychological effect on a lot of people.

And I've seen it in operation. I've heard customers saying 'Well, it's only four pounds' -- when it's £4.99. There's a strange cognitive bias that causes people to read the first number as the important one rather than rounding up. The pricing folk take advantage of this.

I don't think I've ever fallen for the £.4.99 pricing 'trick'. £4.99 is definitely £5 to me... But I've almost certainly at some point fallen for the Decoy Effect or one of the many other tricks marketers and advertisers have in their arsenal. After all, it isn't a multibillion pound industry for nothing.

I accept that some people are more susceptible than others, but people who imagine themselves entirely immune are probably only kidding themselves.

The advertising industry operates by deception. If you think about it, the menu board at the concessions bar is a form of advertising; it displays a list of products and their prices. The goal is to sell the smallest amount of popcorn at the highest price. It's called profit margin.

There's another trick used by retailers related to this one... placing items that will trigger impulse buying at the check-out lines. As customers are waiting in line they have time to peruse the displays, which are comprised mostly of soft drinks, single-serving bags of snack foods and candy bars. A few practical items like batteries are usually included, which in itself isn't a bad thing because it may remind someone that they are almost out of AAA batteries at home. But the food items are tempting enough to induce a lot of people to add something that wasn't on their shopping list to their carts. Customers are spending more for a smaller amount of food; it would have been cheaper in the long run to have purchased the larger bag of chips/crisps than the individual serving size. The manufacturers love this.

Personally, I think it's not ethical. That's why I simply don't buy concessions in theaters. If $3 popcorn isn't healthy then $6.50 is twice unhealthy. The healthiest would be the $0 popcorn (a.k.a. no popcorn at all.)

But I don't really care about healthiness of popcorns. I just don't have the unsatiable urge to snack in a theater. I can do with one, I can do without. If the price isn't fair according to me, I simply refuse to buy one.

I also personally think pricing with .99 is also unethical. I would like the practice to be outlawed.

I dunno. I'm not the best judge of ethics but I will say it's a kinda...sleazy....practice, for lack of a better word. However, no matter how shady a practice it is, I think it's lawful. You just have to educate the public on how to make better choices with their purchases, I guess.

I'd like to know why the Big Mac is $7 here, and the Mcdouble is $2.50. They're the same thing! Mcdonalds used to be a cheap place to get a quick meal. Now I can get better food, at a lower price at In and Out Burger.

I was aware of it and it's imo quite unethical.

Also, I didn't know Ludacris was releasing an iPhone, but I'm proud of him for spelling it correctly for the kids, even if it is overpriced.