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:

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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:

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and this:

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

 

Coke To Bet More On Sugar Water With Bubbles

Consider two things (paywall):

1. Global soda sales and coke’s soda sales are steadily declining:

The pace of Coke’s global soda volume growth slowed to 1% last year from 3% in 2012 as concerns about health and obesity spread. Last month the World Health Organization suggested that individuals limit consumption of added sugars in food and drinks to 6 teaspoons a day—less than the 9 teaspoons in a 12-ounce can of Coke.

Soda volume in Mexico, Coke’s second-largest market, have fallen an estimated 5% or more since the country introduced a tax on sugary beverages in January.

The new drag on Coke’s U.S. business is diet soda. Diet Coke volume has been down for eight straight years, accelerating the decline in the past three. Diet Coke sales plunged 6.8%, in volume terms last year, according to Beverage Digest.

2. But instead of focusing only on diversifying into non-soda beverages,

…the Atlanta-based company plans to double down on its namesake brand. The company is boosting advertising, introducing new products, and using singer Taylor Swift as a pitchwoman. Chief Executive Muhtar Kent has said that last year, when Coke’s U.S. soda volume dropped 2%, was an anomaly. Soda can return to healthy growth, even in the U.S., especially if it is a brand name like Coke, he said.

“Coca-Cola remains magical. We need to work even harder to enhance the romance of the brand in every corner of the world,” Mr. Kent told investors in February. He regularly refers to flagship Coke as the company’s “oxygen” and “lifeblood.”

For starters, he plans to increase global advertising by $1 billion over the next three years. The company spent $3.3 billion last year. Much of the increase will be devoted to soda, including the Sprite and Fanta brands.

But with even Warren Buffet saying “I’m 100% in accord with Coca-Cola’s business strategy and regard Muhtar Kent as the ideal CEO for Coca-Cola” it’s probably a safe bet that Mr Kent (and Mr Buffett) can see the future of Coke’s bubbly sugar water in a way no one else can.

9.6 Degrees, Cereal And Marketing To Kids

John Brownlee writes in Fast Company about a new study from Cornell’s Food and Brand lab about characters on kids’ cereal boxes:

Cereal boxes aimed at children are specifically designed so that the eyes of the mascots look downward, making direct eye contact with the sugar goblins that they are hoping to seduce.

In a study of over 65 cereals and 86 mascots across 10 different grocery stores in New York and Connecticut, Cornell’s Food and Brand Lab studied the characters on the front of cereal boxes. What they found is that all characters and people on cereal boxes –whether Lucky the Leprechaun, or Michael Jordan on a box of Wheaties–are designed to make eye contact with the intended consumer. In fact, they have almost exactly the same focal point: they are staring out from the box at a spot about four feet away, which is the average distance from the shelf of a customer walking down a supermarket aisle.

The result? When a character looks straight into your eyes, brand trust is 16% higher and brand connectivity, 28% higher.

Not sure whether to file this under the “interesting” category or the “disturbing” one. Perhaps both.

Adventures In Marketing A Delicious Yet Unfamiliar Product

What do you do when you have a delicious (and nutritious) product, but it sounds unfamiliar and off-putting to most when they hear about it?

You roam the country and indulge in reckless sampling (a theme that I cover a few days ago when talking about Kind Bars’ ballooning “sampling” budget).

Today, we consider the case of Sabra’s hummus – something that many Americans have been running into a lot over the last year or two.

Consider this:

Lucille Jennings is sitting in a mall in a suburb of Salt Lake City, about to have her first taste of hummus. The great-grandmother peels back the seal on a small cup of Sabra and peers at the beige mass inside. “You know what that reminds me of?” she says. “Chicken mesh. My mom and dad were farmers, and they ordered baby chicks through the mail. They fed them this kind of stuff.”

But,

According to Sabra, more than 70% of people who try it at a truck purchase some within 60 days. In the past five years, Sabra’s presence in households has gone up 118%. America is ready.

So, how did they respond?

 …in both product and marketing, Sabra has recalibrated to meet Americans where (and how) they already eat. Chief among its efforts: It has six colorful trucks roaming the country to hawk hummus, stopping in cities like Phoenix and Milwaukee for four to six weeks at a time. Staffers hand out tiny packs of the product at supermarkets and churches and Little League games, hoping to lure newbies.

Catch the rest of the story here.

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