Monday, February 19, 2007

Making Sense of coffee experience and prices

No point complaining about high prices. They keep others from getting their hands on to all the nice things that you enjoy.

Of course, sometimes you have to play "others", but that's life.

Tim Harford (writing in the Financial Times) tells us that even hidden prices are functional and make the world a better place:

Perhaps, however, these hidden extras aren’t quite so bad. In fact, I think the world might be more expensive - and more unfair - without them. If that seems counterintuitive, it’s because we tend to assume that the alternative to hidden charges is no charges at all.

Source: / Weekend columnists / Tim Harford - The Undercover Economist: Cheap tricks

The very next day I got a chance to reflect upon life, the coffee experience and hidden prices.


Source: Cafe Coffee Day's Mission Statement

I have ranted about cornmeal sticks with coffee at the Cafe Coffee Day before.

On Saturday they served up a packet of sticks again and impaired an otherwise perfect time. The sticks shouldn't have come with either the coffee or the sandwich that I had ordered.

I figured they were part of the SUPER SW VEG TIKK, which means their cost was hidden in the price of the sandwich.

My wife didn't seem to mind and Tim Harford says that hidden prices make economic sense, so why am I ranting about a free packet that cost 5% of the total bill?

Because hidden prices are functional, only when you have the option to incur the expenditure.

I welcome expensive minibars in hotel rooms, because I rarely pick anything from them. And I'd resent a free minibar because guests may be tempted to drink to excess and push up room rent for everybody. On the other hand, nobody should have to pay for the soap in their bathrooms.

In other words, a purchased product or service package should meet one's expectations of what it's supposed to be. No need to play with the expectations, unless you can deliver a significantly better, and welcome, experience.

Therefore, IMHO, a better option for Cafe Coffee Day may be to let the customers ask for a free packet of cornmeal sticks.


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