Of Menus, Pricing And Revenue Maximization

The Guardian has an interesting article that everyone should read on how restaurants subtly manipulate patron behavior.

First on the menu, sorry, list, is the famous “anchor” Pricing strategy:

While you would assume that we read a menu from left to right, studies show that our eyes gravitate toward the upper right-hand corner first. This is often where the “anchor” – or the most profitable item – is located.

But this particular ploy is more cunning than simply getting you to buy the most expensive dishes: typically, having this usually quite costly dish listed will make everything look reasonably priced in comparison.

“Having an outrageously expensive item is both likely to get publicity for a restaurant, and will also get people to spend more,” says Charles Spence, experimental psychologist at the University of Oxford and co-author of The Perfect Meal: The Multisensory Science of Food and Dining.

“People think ‘I wonder if anyone ever orders that?’, without realising that its true purpose is to make the next most expensive item seem cheaper.”

Conversely, research suggests that diners look at the bottom left of a menu last, so this is where the least expensive dishes will be positioned.

Be sure to check out the rest of the article for other clever ways in which restaurants (and waiters) maximize their revenue on your next visit. 

Clever Marketing, From LG

What do you do when your main competitor has pretty much appropriated the word “Galaxy”?

You take out Ads like this one:


Will it translate into sales?

Not sure, but it will at least make potential consumers pause for a second and grab some eyeballs, so it’s probably a good start. Then, comes the real marketing magic…

Marketing To Teens: 1956 Edition

As part of celebrating 125 years of being around, the Wall Street Journal recently highlighted a number of stories it published over the years.

The one that stood out to me, on the business front, was this 1956 piece called “Teenage Customers: Merchants Seek Teens’ Dollars, Influence Now, Brand Loyalty Later” – that highlights the relatively advanced state of marketing, even back then. 

I can’t copy paste an excerpt (no OCR), so two image excerpts will have to do:


and this:


If you subscribe to The WSJ, the compilation of stories is worth taking a look at…


Aereo’s Death Knell

For the uninitiated,

Aereo is a two-year-old company that picks up television signals and sends them to the Internet-connected devices of Aereo subscribers, all without permission from or payment to the broadcasters who provide the programming. The broadcasters, including Walt Disney Co.’s ABC, Comcast Corp.’s NBC, CBS Corp. and 21st Century Fox, argued that Aereo is an illegal operation because it violates the networks’ exclusive rights to transmit their shows to the public.

On June 25, 2014, the broadcasters won.

Keach Hagey writes on The WSJ, that this is most like the death knell for Aereo, and it very well could be. Which is a terrible thing for consumers. While anyone is free to install an antenna on their rooftop or rig up their own version of Aereo at home and do everything that Aereo was giving them, it is likely that they may not want to invest ~ $200 or $300 doing that. Or, they may live in an apartment or house where installing an antenna is difficult if not downright impossible.

So the reason they liked Aereo and were willing to pay Aereo a handful of dollars every month is because Aereo made it very convenient to do what each American resident is allowed to 100% legally. Tap into and if they want, record and view over-the-air programming from anywhere, at anytime. 

In effect then, the Supreme Court outlawing convenience, in the name of copyright law that was written for a different era. And since it’s not the SC’s job to write new laws, Congress must ideally do that and protect the consumer’s rights. But for that to happen, consumers must group together and fund tens of millions of lobbying and get such a law written and passed. 

Good luck to anyone waiting for that day.  


The 10 Companies That Feed The World

Screen shot 2014 07 07 at 10 58 44 am

Oxfam, the charity, has an interesting graphic (above) that shows the 10 most powerful food manufacturers in the world.  

At least in the developed world, where most things people eat are plucked/cleaned or made/assembled, packaged and distributed, they illustrate how 80% – or more – of what the average person eats every day touches one of these 10 companies’ global supply chains.  And it shows you what kind of massive economies of scale are at play in the packaged food industry. 

A secondary takeaway, at least to me, is that because many of these companies compete in the same categories and sub-categories on our grocery store shelves with mostly undifferentiated products, branding and marketing is how they grab market share from each other. Which is of course why these 10 companies are also generally acknowledged to THE gurus of consumer marketing. 

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