Reader Philip Goldberg sent this photo of iced coffee pricing. Readers, what kind of consumer might order the medium instead of the large? What’s the store’s incentive to price the two products the same? And, most important, where is this magical place that sells iced coffee for only $1.49!?
Photo: Philip Goldberg
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Some people just want a medium drink. It’s like getting the $1.50 bottle of 20oz Pepsi instead of the $1.50 liter. Or the small bag of $1 chips instead of the $1 jumbo size bag.
While on a roadtrip I needed a caffeine boost so I went to the minimart to get a soda. They had a special, $0.99 for any size fountain drink. It did not need or want the monster-mega-size drink For a split second I felt that I should get the biggest size just because, but in the end I selected the size I felt I would drink for the rest of the drive.
Marginal utility declines on a long drive when you order the 100 oz “bladder buster”. It only lengthens your drive when you stop multiple times for a bathroom break.
WEBMEISTER: SORRY SPELLING ERRORS> THIS IS BETTER > THNX
Ironically 98% of the Hot Mocchachino you buy is water– virtually a free commodity. Yes it is hot water which cost a three pennies more.
But the flavor is in the dissolved solutes: Fat, Chocolate, Coffee and boils down to a small residue about the size of your little finger nail.
Starbucks prices a coffee upsize by a dollar or more. But in reality, the single small cup of coffee is 98% water(which is virtually cost-free) and maybe 10 cents of coffee, milk, sugar, or chocolate syryp. A large or jumbo(or tall vente, grande or whatever you call it) is marginally about 2 cents more in cost.
The best thing about the retail coffee business is selling a virtually cost free product for $4.35. Only the bottle water business has better margins.
I have a market plan to sell oxygen, with an odometer on how many breaths you take. I’ll call it Starbreath’s. It is caffeinated.
I was in a DUNKIN’ DONUTS shop and they had a sign which said (and I quote):
ICED TEA
ANY SIZE
ONLY 99 cents!
Check it out…
Anyone that knows they could only drink a Medium coffee would likely purchase a medium coffee.
I pass on a secret that will have you save zillions. A quad, iced express at Starbucks packs much more of a wallop then a regular iced coffee. And only $3.05. An iced plain joe will cost your almost the same. Go for the Quad!
That’s it!
I would suspect they ran out of medium size cups.
That good sir, is a Wawa. Any one not living in the Delaware valley is missing out!