tag:blogger.com,1999:blog-3471471289744825428.post3036858227621025552..comments2024-03-11T00:31:41.186-07:00Comments on The Oregon Economics Blog: Beeronomics: Non-Linear PricingPatrick Emersonhttp://www.blogger.com/profile/17242234148546323374noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-3471471289744825428.post-87948974739588272002010-09-15T13:57:25.210-07:002010-09-15T13:57:25.210-07:00Bill,
I suppose you could argue that they wanted...Bill, <br /><br />I suppose you could argue that they wanted to give an incentive for people to try lots of different beers. Makes sense if you are trying to market your entire line up I suppose.Patrick Emersonhttps://www.blogger.com/profile/17242234148546323374noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-39872372995047473432010-09-14T18:16:31.163-07:002010-09-14T18:16:31.163-07:00OK, since this thread picked back up...
Patrick, ...OK, since this thread picked back up...<br /><br />Patrick, what did you think of the backwards non-linear pricing at Hopworks BikeToBeerFest? The high-octane beers were 1 ticket for 4-5 ounces, or 6 tickets for 15-16 ounces. I unleashed my inner cheapskate and ended up a little hammered.Bill Nighthttps://www.blogger.com/profile/09202318621724165312noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-63447120804310313272010-09-14T09:02:22.420-07:002010-09-14T09:02:22.420-07:00Skubic,
I think I'd call that signalling! htt...Skubic,<br /><br />I think I'd call that signalling! http://oregonecon.blogspot.com/search?q=signallingPatrick Emersonhttps://www.blogger.com/profile/17242234148546323374noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-71872042041860716692010-09-14T08:43:45.249-07:002010-09-14T08:43:45.249-07:00I just stumbled upon this blog. Pure genius.
This...I just stumbled upon this blog. Pure genius.<br /><br />This is an interesting conversation. <br /><br />My two cents: Look at all the 22 oz bottles of beer on a shlt. What do you find? Typically it is limited edition / new releases / high gravity fun stuff that is quite pricey. $4-20 per bottle. That is some prime real estate.<br /><br />If I was a brewery such as Stone, Rogue, Widmer, Anchor Steam... that has both 6 packs AND 22 oz bombers why in the world would I drop my 22oz prices to a Six Pack Equivelent (SPE) Price? <br /><br />If Anchor sold 22 oz bombers for the SPE at $1.95 per bomber wouldn't that look like a cheap beer. Thus making less money and devaluing their product? It makes sense they charge $3.50-4.00 for their bombers. They are in the right place at the right time. <br /><br />What would the economic name for this be? Prime Real Estate Pricing?Skubichttps://www.blogger.com/profile/07615417326472212962noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-39678106574322075992010-04-25T16:08:25.634-07:002010-04-25T16:08:25.634-07:00This is a beautiful discussion (I include the comm...This is a beautiful discussion (I include the comments) of the intersection between economics and marketing.Fred Thompsonhttps://www.blogger.com/profile/02979504812638374338noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-65468662057569566142010-04-24T07:15:16.884-07:002010-04-24T07:15:16.884-07:00As part of my MBA coursework, I did a case study o...As part of my MBA coursework, I did a case study on a small east coast brewery. In my discussions, we got into the 6-pack, 4-pack, and 22oz pricing differentials, and he explained it like this:<br /><br />1) He has customers willing to pay between $9 and $12 per six-pack.<br />2) Customers will purchase a $10 4-pack of a premium beer, but they will not purchase a $12 4-pack.<br />3) Customers are willing to purchase $6 22oz bottles of that same premium beer.<br />4) Thus, he can make more money by selling two 22oz bottles than by selling a $10 4-pack.<br /><br />I don't know how stores on the west coast typically work, but you almost never see a beer offered in both 22oz bottles and 6-packs on the east coast. The high-alcohol, "imperial" style, and limited release beers are sold in 22oz bottles, while the rest get put in 6-packs.The Oriole Wayhttps://www.blogger.com/profile/16483309131692836436noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-61873782454679630262010-04-23T16:57:03.870-07:002010-04-23T16:57:03.870-07:00Hi Patrick: Thanks for humoring me.
I can unders...Hi Patrick: Thanks for humoring me.<br /><br />I can understand price discrimination to some extent. But I'm not sure it explains the beer pricing, for several reasons:<br /><br />1. If I take one 12-oz. bottle from a six pack, and take it to the cash register, I will pay less per ounce than if I bought a 22-oz. bottle. In that case, the low demander wins.<br /><br />2. As I noted, Coca-Cola -- an economically savvy company if ever there was one -- doesn't employ this kind of price discrimination to take as much of their customers' money as possible. Why not? At the other end of the spectrum, liquor and wine use price discrimination differently: they have things like reserve bottlings to help separate the big spenders from the cheapskates (brewers do this too, of course). But when it comes to volumes of the same substance, makers of wine and liquor pass cube-square savings on to the customer. What is different about beer?<br /><br />3. I'm not saying that brewers and/or distributors aren't smart, greedy people, but did they really consider the economics of first- and second-degree price discrimination, then reject them and come up with an even craftier third-degree price discrimination? Moreover, are all of them colluding to fix higher prices on bombers?<br /><br />Is it possible that bomber pricing is just a market inefficiency that the beer industry is taking advantage of while it lasts? That once people become informed about the price difference, bomber prices will begin showing the volume discount that other liquids do?<br /><br />Please note that I'm an economic ignoramus, just trying to make sense of these things.Bill Nighthttps://www.blogger.com/profile/09202318621724165312noreply@blogger.com