Nudge Why these irrational prices actually work
15 snips
Mar 4, 2024 
Discover why customers spend $342 billion on bottled water when a safer, cheaper alternative exists. Learn how unconventional pricing strategies drive consumer behavior, from high-priced menu items to scarcity tactics. Explore how Costco leverages strategic pricing for customer loyalty and profitability. Uncover the success of embracing a 'cheap' image in marketing, with examples from Ryanair. Delve into the psychology of random rewards and irrational pricing strategies in businesses like Pret and Fiji Water.
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Fiji Water's Arsenic Controversy
- Fiji water claims superiority over Cleveland tap water but was found to contain arsenic while Cleveland tap water did not.
- Despite tap water being cheaper and often safer, consumers irrationally pay 300 times more for bottled water.
Serendipity 3's Price Anchoring
- New York's Serendipity 3 restaurant sells $214 grilled cheese as a PR stunt and anchor price.
- This high-priced item makes their cheaper items appear well-priced and boosts overall sales.
Supreme's Scarcity Frenzy
- Supreme creates extreme scarcity with limited product drops, selling items like a $25 logoed measuring cup that usually costs $5.
- Traffic spikes by 17,000% during drops, fueling a scarcity frenzy and brand growth.