The cost of Upgrades: Bait-and-Switch and modified Bait and switch pricing Tactics

Picture Courtesy Pixabay.com

In 1987, I was a Sales Executive for a company that marketed electronic typewriters, sold in 14-inch and 17-inch carriage sizes. The product line 400 we marketed was as follows:

1. Network 400, 14-inch carriage size: Basic electronic typewriter that functioned like a manual typewriter. Its advantages included replaceable daisy wheels for font change and a correction facility. Cost: Rs 9,990/-

                    Picture Courtesy: Pixabay.com

2. Network 401:  An upgraded model that had a small 20-character LED display. Cost: Rs 11,990/-

3. Network 411: This model featured a one-line display and 8KB memory, allowing users to store standard letter formats. Cost: Rs 13,990/-

4. Network 431: Same as the 411 model, it had 32 KB memory but priced higher at Rs 15,990/-

Now, one might ask, what's the big deal? The big deal is that the chip controlling the display and memory was the same across models. In the lower-end models, the display was simply disabled. And for those models that offered memory, the cost difference between an 8 KB chip and a 32 KB chip was marginal—perhaps Rs 500/- at most (considering 1987 prices).

The Pricing Tactic: Customers were led to pay increasingly higher prices for incremental feature enhancements. During demonstrations, the salesperson would often showcase a higher-end model with a display, bold facility, and memory. However, if the customer ended up purchasing the basic Network 400, they would receive a simple typewriter—one without bold typing capabilities.

Some customers may have felt disappointed, but they never explicitly asked if the Network 400 had bold typing. Since they didn’t ask, salespeople remained diplomatically silent.

The E-Commerce Parallel: A modified bait and switch happens on e-commerce platforms today. For instance, a Facebook advertisement may display a Timex watch for Rs 1,285/-, but upon clicking, the actual product page would list it at Rs 1,956/-—an increase of almost Rs 700/- (over 50%).

This kind of pricing deception creates false expectations, luring customers in with an attractive price—only for them to discover the real cost later.

Keywords: Hidden costs, Marketing tricks, Deceptive E-commerce pricing, Selling tactics, Product differentiation, False advertising, Customer perception, Pricing deception. 

Planned Obsolescence and Pricing Tricks: How Companies Make You Spend More

Planned obsolescence is a widely discussed strategy in which companies deliberately design products with a limited lifespan. Over time, these products lose their utility and eventually stop functioning, forcing consumers to purchase replacements. The companies' goal is to ensure that customers buy their brand again instead of switching to a competitor.

One famous example is the original light bulb, which is said to have lasted over a hundred years. Light bulb manufacturers quickly realized that their business model was flawed, leading to the production of bulbs designed to last only a few years. Similarly, LED bulbs, initially marketed as having a lifespan of 20,000 hours, often fail within a year or two. When questioned, some LED manufacturers blamed low-quality radiators, usually sourced from China, for their premature failure. Consumers prefer cheap LED bulbs, even if they last only a couple of years, rather than paying ten times more for a long-lasting alternative. As a result, functioning LED chips are discarded, contributing to global e-waste.

Let’s discuss how companies compel consumers to make purchases, either due to a lack of choice or through subtle manipulative tactics:

Non-replaceable Batteries in Mobile Phones:

In the past, mobile phone batteries could be replaced when they lost capacity or took too long to charge. Today, batteries are integrated into the phone, making it impossible for consumers to replace them easily. If a battery fails, users must replace the entire phone. This is akin to buying a $100 quartz watch and discarding it because the $1 battery inside cannot be replaced.

2. Price Discrimination Based on Device Type:

Reports suggest that ride-hailing apps, e-commerce platforms, and quick-commerce services charge higher prices to iPhone users than to Android users. The underlying assumption is that iPhone users are more affluent and willing to pay a premium for the same services.

3. Surge Pricing Based on Battery Life:

Research has indicated that ride-hailing apps display higher surge pricing when a user’s phone battery is low. The assumption is that users with low battery life are more likely to book a ride immediately without comparing competitors.

4. Differential Pricing in Quick-Commerce Apps:

Quick-commerce platforms like Zepto have been observed engaging in deceptive pricing practices. The same product may be priced differently when viewed from two different mobile devices. A regular customer might see a higher price, while a new customer is offered discounts, cashback, and better deals. Traditional marketing strategies emphasize rewarding loyal customers, but quick-commerce apps focus on new customer acquisition and boosting brand valuation. This approach benefits companies seeking to increase their market valuation ahead of an IPO.

These tactics highlight how businesses prioritize profits over consumer interests, often at the cost of fairness and sustainability. 

Keywords: Planned Obsolescence, Limited lifespan, Replacement purchases, Light bulb longevity, LED failure, E-waste, Non-replaceable batteries, Mobile phones, Price discrimination, Device-based pricing,  Surge pricing, Battery life manipulation, Quick-commerce apps, Differential pricing,  Customer loyalty, Market valuation, Consumer manipulation, and Sustainability. 

General Concepts: Planned obsolescence, Consumer manipulation, Product lifespan, forced upgrades, Market strategy, Corporate profit, Consumer spending

Industries:  Light bulb lifespan, LED bulb failure, Mobile phone batteries, Non-replaceable batteries, Quartz watch analogy, E-waste crisis, 

Pricing Strategies & Tactics:  Price discrimination, Device-based pricing,  iPhone vs. Android pricing, Surge pricing, Battery-based pricing, Ride-hailing apps, Dynamic pricing, Quick-commerce platforms, Zepto pricing

 

The hot Indian Cola War: How Pepsi Torched Coca-Cola’s Comeback @ 1990s

 

Marketing is a field full of nonstop action. It’s a dog-eat-dog business, where one needs to be on one's toes 24/7, 365 days a year. In marketing, it’s often said that you must execute a counterplan even before your competitors can think of an offensive.

Many from the present generation may not remember, but in 1975, the then Janata government asked all foreign companies to either reduce their control over Indian companies or exit the country. As a result, many multinational corporations (MNCs) left India, creating a golden era (1975-1991) for Indian homegrown brand dominance. Companies like Bajaj, Ambassador, Thums Up, and Fanta ruled the market during this time.

The liberalization, privatization, and globalization (LPG) policy of 1991 opened India's gates to foreign companies. One of the first to enter was Pepsi, and it was introduced as Lehar Pepsi. The government allowed Pepsi to enter under the condition that it would contribute to India's exports.

To comply, Pepsi strategically entered the agriculture sector while quietly establishing itself in the beverage industry. It didn’t take long for Pepsi to settle in and dominate the market.

But where Pepsi goes, Coca-Cola was bound to follow. Determined to reclaim its lost ground, Coca-Cola planned a grand comeback. The company wanted to make a splash, meticulously preparing for a massive launch campaign. Everything was going according to plan—until they hit a major roadblock.

Coca-Cola had planned to dominate the front pages of all major newspapers in India on the day of its relaunch. However, Pepsi got wind of Coca-Cola’s strategy through its intelligence network. Acting swiftly and quietly, Pepsi purchased all the front-page advertising space in the leading newspapers before Coca-Cola could book them.

The result? On Coca-Cola’s much-anticipated launch day, October 19, 1993, readers woke up to newspapers filled with Pepsi ads instead. Pepsi had successfully outmanoeuvred Coke, proving that in marketing, timing and strategy are everything.  Not only that it was rumoured that Pepsi dealers and bottlers quietly bought up all the reusable glass bottles of Coca-Cola from the market and smashed them. No one knows the truthfulness of this story.  

In an industry where glass bottles must be returned to the factory and reused, this below-the-belt tactic from Pepsi severely hampered Coca-Cola’s logistics. As a result, production suffered. 

Interestingly, the Indian market has not been very kind to the iconic Coca-Cola brand. Its flagship product, Coke, lags in third place: Sprite (20%), Thums Up (16%), Coke (9%) and Pepsi comes in at 4^th with 8%. (Source: Statista).

That must be quite a bitter pill to swallow for Coca-Cola. The only silver lining? Both Sprite and Thums Up are owned by Coca-Cola India, so, at the end of the day, they still dominate the market.

Key words: Cola Wars, Coke vs. Pepsi rivalry, Coca-Cola vs. Pepsi market battle, Soft drink market competition, Pepsi marketing strategy, Coca-Cola business challenges, Pepsi vs. Coke in India, Soft drink industry trends, Top-selling soft drinks in India, Coca-Cola sales decline

"AMUL Disrupts the Market: When Curd Becomes Cheaper Than Milk!" 🥛🔄🍶

Marketing is a strange field. Normal logic does not hold water.  For example, 500 ml or 500 grams of milk costs 31 rupees @ 6.2 paisa per gram, and typically curd 400 grams costs 45 rupees for 400 grams @ 11.25 paisa per gram. 

Economists always talk about "value addition". Don't know what value addition is in letting milk become curds!!. Add some yeast and keep it aside for a night. 

In every market, there is a disruptor and that disruptor is AMUL. AMUL has come out with new pricing for its curd. 

AMUL is selling 850 grams of curd at Rs 50. That is 5.88 paisa per gram. 

And in comparison all competitors charge 100 Rs for 1000 grams and that 10 Paisa per gram. So AMUL's price is almost 50% of that of the competitors!! The cost per gram of curd is cheaper than milk. How is it possible?

Keywords: How AMUL sets competitive prices, Dairy industry pricing strategies, Why curd is more expensive than milk, AMUL vs competitors' pricing, Cheapest curd in India, Economics of dairy pricing,

Points to Ponder:  Why is AMUL curd cheaper than milk? AMUL’s disruptive pricing strategy in the dairy market, How AMUL is changing the curd pricing game, Comparing AMUL curd with other brands: Which is cheaper? The economics behind milk and curd pricing in India.

"Rage-Baiting & Hypocrisy"🔥📺

Rage baiting is a manipulative online tactic that intentionally provokes anger or outrage to increase engagement. It's often used to increase traffic, subscribers, and revenue.

So why patronage such shows. I have not even seen one India latent show but I am told that each show had views over 3 to 4 crores. So most of the viewers are hypocrites. They watched it, loved the content, and now are saying  "Chee, chee"

Keywords: How rage baiting increases views, Why do people engage with controversial content, The Psychology Behind Viral Outrage, Hate-watching phenomenon, Media tactics to provoke outrage, Manipulative content marketing, 

Points to Ponder:  Why do people watch content they claim to hate? How rage baiting tricks audiences into higher engagement, The dark side of viral marketing and social media outrage, Why controversial shows get millions of views despite criticism, The role of hypocrisy in boosting online content popularity,