Showing posts with label Fast-food. Show all posts
Showing posts with label Fast-food. Show all posts

Sunday, December 27, 2009

Decoding Fast-Food Menus

Fast-food menus are among the most rigorously tested products of our consumer culture. Because the decision of what to order for lunch isn't that important in the grand scheme of things, we don't spend much time or thought on it. Instead, we rely on cues in the environment. If your friend mentioned having a barbecue sandwich yesterday, you're more likely to try it today (assuming you like barbecue, and the friend). Memories are short, so the most powerful source of cues is the menu. The prices are designed to get consumers to order more than they might have otherwise.
• The most common trick of fast-food menus is the "combo meal." As everyone understands, the combo meal offers an incentive to order something extra. The burger plus fries plus soda combination costs just pennies more than burger plus soda à la carte. You might as well get the fries — it seems like you're throwing away money not to order it. For most consumers, this is irresistible.
There's another reason fast-food places offer combo meals. They foster confusion. It’s hard to be sure how much the burger costs, and how much the drink costs—and whether it’s too much. So consumers are a bit less price-sensitive with combos. Of course, eventually repeat customers become familiar with the prices of their favorite combos. For this reason, fast-food menus are an ever-changing caloric kaleidoscope. New entrees are offered, and old ones change or vanish. Combos can be super-sized. Do you want curly fries? You can’t buy exactly the same thing you did last time (neither can you compare prices, exactly).
• The Starbucks menu uses the "rule of three." The menu offers three sizes of coffees, given the enigmatic names of Tall, Grande, and Venti. (They're 12, 16, and 20 ounces respectively; 24 ounces for cold Venti drinks, to allow for ice.) Since Starbucks newbies won't know what they're getting, they tend to order the middle choice, Grande. In the psychology literature, this is known as "extremeness aversion" — people instinctively favor a middle choice, figuring it's safer. Guess what? You've just ordered two cups of expensive coffee. The Grande's sixteen ounces is two regular cups. Here's a secret: Most Starbucks will serve you eight ounces of coffee, but you have to ask for a "Short" coffee (which isn't listed on the menu). You have to remember that password "Short": Company policy says that a customer who asks for a "small" coffee is to be given a "Tall" one.
• Anyone who doubts the power of prices ending in 9 should check out a fast-food menu. The menu above, at a Los Angeles Pollo Loco outlet, has 75 prices, and all but one end in the digit "9."
• The exception: a deal offering 10 buffalo wings for $5. Quick: How much is that per wing? It takes most of us a moment to do the math. And that's the point: not many people bother, not with kids screaming in the back seat. But "10 wings for $5" sounds like a better deal than "50 cents a wing."
• Critics have blasted the nutritional value of fast food, causing both the industry and government to take action. Since 2008 New York City has required fast-food places to post calories—in large fonts—on menus. This may or may not have promoted healthier eating. It probably hasn't hurt chain profits, though. The reason is that consumers now have two sets of numbers to juggle: calories and dollars. As many experiments have shown, the human mind has a finite capacity to deal with numerical information. By encouraging diners to pay more attention to calories, the new menus prompt them to pay less attention to prices. That gives chains scope to charge a little more. (Not only that, the salads are among the most expensive things on McDonald's menus, anyway.)

SEE ALSO
Poundstone, William. "Menu Mind Games." New York, December 14, 2009.
Poundstone, William. "Menu Psych." YouTube, 2009.

Thursday, October 29, 2009

“Artisanal”: A Word That’ll Cost You

How much is a word worth? If the word is "artisanal," a lot. Try pricing artisanal chocolates or artisanal jeans. Studio D'Artisan jeans run $350, while some R by 45RPM models can still top $1000, even in these chastened times. The word "artisanal" also works its magic on menus and in markets. Foodies will insist that "artisanal" is a meaningful distinction in danger of being overused. That ship has sailed. The "artisanal" bread on some of Jack in the Box's sandwiches has "become a huge hit with the burgers-and-fries crowd," crowed a 2004 press release. Diet conscious? Weight Watchers has "Artisan" pizza. You'll find it in your grocer's frozen-food aisle.

What does "artisanal" mean, anyway? For one thing, it means the seller can charge more money. Psychological studies have refuted the longtime economic notion of a "reserve price," a fixed maximum one is willing to pay for something. Is $8 reasonable price for a box of chocolates, or is $80? The answer will depend on the context: how nice a box it's in, what we see other people buying, and so on. Above all, we rely on memory. In deciding whether $80 is too much to pay for chocolates, I remember the prices I've seen advertised and what I paid the last time. Remembered prices allow us to impose a veneer of rationality and consistency on our money decisions. Inside, we're more like kids in a candy store. We want what we want, and we haven't a clue what it should cost.
That's where a word like "artisanal" comes in. Its sends the message, remembered prices don't count. "Artisanal" jeans are different from plain old jeans. Therefore, the old prices don't apply. The consumer is left guessing at what a fair price might be. Influenced by context (stores are all about context) many choose to pay a price that has little to do with the cost of materials and labor. Eric Wilson, in The New York Times, wrote

During the modern gilded age, the spiraling prices of designer clothes had more to do with driving profits than the actual design or construction of a garment. Designers found they could charge a lot for the perception of prestige. Dresses and suits and handbags were priced like cars, and consumers didn’t blink. But with jeans, it just felt more obvious that some kind of game was being played; the basic elements, after all, had not changed substantially in decades: five pockets, cotton, some rivets.


Don't get me wrong: Many "artisanal" products are truly superior. The term's adoption by frozen and fast-food producers suggests it's also smart marketing. Jack in the Box charges more for its artisanal-bread sandwiches than for more meat-intensive burgers.
Why has "artisanal" been so widely adopted? Probably because it's one of those poetic terms (like "creamery" butter and "heirloom" tomatoes) that sounds great without making much of a factual claim. An artisan is someone who makes something, so "artisanal" can basically apply to anything made by humans. It's therefore become the all-purpose excuse for charging a premium.