My financial culture shock hasn’t stopped hitting almost two months since I moved back home. The latest one is about pricing.
Last night after an unsuccessful attempt to get into a restaurant, we headed to Domino’s to take a pizza home. Even though it’s an American brand, Domino’s has a pretty local menu. Having never ordered a pizza in such a place in Taiwan, I got to experience something new with my husband.
We knew exactly what we wanted – one large pizza – not soda, breadsticks, or pasta. That should make our decision easy. My husband suggested getting the classic “Deluxe”, and I agreed, until we saw on a separate page, there are four kinds of pizza that are priced almost 50% lower than the Deluxe if you pick it up.
So we quickly selected the one out of the four that looked the most appetizing so that we don’t annoy the cashier that had been standing by waiting for our order. “Good that I flipped the page!” I thought.
While we were waiting for our pizza, the random offers that I had encountered elsewhere started flooding back -the “Buy One, Get One” coupons that I always see in certain places; the special combo from TV commercials; ordering online so you can get a free bottle of Pepsi, etc.
In other words, no one ever just buys one large pizza at its original price. For some reason, an American pizza delivery chain is one of those places you should never pay the full price on your order.
I shared this discovery with my husband. He just shook his head and said, “Every purchase is like that in Taiwan.”
Now, that’s news to me. The more we discussed it though, the more I realized why a lot of the food decisions make us tired these days.
Pricing induced decision fatigue
Bundle pricing is in vogue here. Rarely would you go to a restaurant where there isn’t a set menu that comes with special pricing. Instead of picking what you want to eat and adding up the individual prices, you are thrown into a cost benefit analysis when your brain is dying for calories.
I will use fast food as examples to make this sound more familiar. Let’s say you and your spouse just want two burgers for lunch. However, ordering those a la carte will cost you $10 total. If you get a “Couple’s Combo”, which also comes with two drinks and two sides, it only costs you $7. So of course you should get the combo.
Should you really, though? For the sides, you can only pick fries or onion rings. Want something healthier? No worries, you can pay $1 extra each to switch to apples. Don’t want soda for your beverage? You can switch to freshly brewed iced tea for no charge, but it will be a smaller size. You can upgrade your beverage to normal size, which comes with larger sides, for $1 more each.
So originally you just have a simple task – get two burgers, pay 10 bucks. The restaurant complicated your decision by introducing a bunch of specials that are supposed to save you money. Once you go down that road, in order to get what you really want, it ends up costing you more than $10.
You get the idea.
You may know that we value variety in our Chinese food culture. This increases the potential combinations, and choices you have to make, to get to what you really want. Of course you can’t just pay the full price for the one dish that you were craving. That is a waste of money!
While I may still have the ability, developed from living here for over 20 years, to make this type of decision quickly enough before I die of hunger, my husband has become weary about the prospect of ordering altogether. He also has the extra burden of a language barrier. While he has learned plenty of Chinese, having to process a foreign language on top of a math problem is just too much.
We had dreamed about all this delicious food that my country has to offer while we were away. Now that we are here, making food decisions becomes such a draining task that all we want to do is stay home.
Good deals vs. what you really want
If you know exactly what you want, there’s nothing more annoying than having to take items you don’t need to get to what you want. That’s the case for cable channels, unlimited cell phone minutes, and happy meals. While we make a calculated decision to take bundle deals, the fact thatwe have to calculate so much makes the purchase decision more complicated than it should be.
On the other hand, I remember times where we were very grateful for pre-defined bundles or sets. Now I see the reason is because it’s helpful when we don’t know exactly what we want, and it’s easier to have someone else decide for us. It’s equally frustrating to have to pick 10 courses from 10 different lists when you don’t want anything in particular.
In other words, knowing what you truly want diminishes the possibility you will over-consume and not get a good ‘deal’. If you look for deals without having a goal in mind, you are more likely to spend more on things you did not need in the first place. Of course, you won’t really think about that until you feel extremely full on course 5 of the 10-course meal.
Pricing shouldn’t change our needs
Businesses use pricing to induce demand, meaning they hope to use it to sell more to increase profits. They have no reason to trade their profits for your benefit. Nevertheless, is “buying more” really what we need, even if overall each item is cheaper? The answer could be yes, if we need all of the items anyway before the discount. But, most of the time, we don’t need all of what we’re offered.
As a business owner who needs to price her services, I am very careful not to fall into the trap of trying to influence demand with pricing. I have always made my pricing easy to evaluate because I want my clients to know exactly what they are getting into, and how much it will cost them. While I might be able to make the pricing more profitable for me, I decided to make it simple. I believe making financial decisions easy to evaluate is also a value for my clients.
I wish more businesses valued simplicity and transparency in pricing. Show unit prices front and center. Price items a la carte fair and square. De-bundle offers so we can choose only what is of value to us. There will be much more efficiency, a lot less waste, and a lot more clarity on what is important to us.
As to how we are going to deal with the seemingly endless bundles, specials, and menu sets coming our way, I’m not really sure. Maybe one day we will get over our evaluation fatigue. For now, I guess I’ll cook more.