6 ms·

Medium, Please

36 points by illdave 16y ago

rubyrescue 16y ago
what are the margins on a cup of coffee?
- epochwolf 16y ago
  When I worked at Subway a 32oz soda cost the store around 10 cents total for the soda and the cup. We sold them for $1.45 each. (Approximate, this was 4 years ago) I would imagine plain coffee has similar margins but there is a fair amount of overhead to run a store which is why the markup is so high.
  - kia 16y ago
    Drinks is the biggest revenue source for fast food chains.
    - genieyclo 16y ago
      For any food establishment. Or you're doing something wrong.
apinstein 16y ago
I know how and why it works, but some part of me feels that it's improper. I can't be sure because TFA didn't show it, but I'll bet that the store have a display with sizes and prices readily visible. Thus, taking this approach is basically saying "We're going to try to trick you into ordering more than you want, charge you more than you expected, and hope that in aggregate our customers are too lazy or don't care enough about 50 cents to push back. At least for a few years, and by then we'll be much richer." I can just never bring myself to resorting to such tricks. Am I the only one?
- michaelbuckbee 16y ago
  I think you're overstating the case, things like: Large vs Small beer - http://www.youtube.com/watch?v=1xSDI9Gg63I http://www.youtube.com/watch?v=1xSDI9Gg63I - are flatly unethical. If someone asked for a 16oz Coffee and you gave them 12oz in a skinny cup so it looked taller that would be unethical as well. But, if you have a series of smaller to larger cups lined up on a counter and you ask people which one they want and then give them what they asked for, I can't see that being unethical. To me, this is just another form of advertising.
phylofx 16y ago
"...astonishing..."
shalmanese 16y ago
This is the well known Goldilocks effect: http://www.venchar.com/2004/01/extremeness_ave.html http://www.venchar.com/2004/01/extremeness_ave.html
kunday 16y ago
you should probably read predictably irrational if you have not already..
- Adrock 16y ago
  Dan Ariely's Predictably Irrational is really good and the very first chapter discusses this exact phenomenon and some of the subtleties surrounding it. He also mentions it in one of his excellent TED talks: http://www.ted.com/speakers/dan_ariely.html http://www.ted.com/speakers/dan_ariely.html
Deestan 16y ago
Aren't you afraid that you are abusing the trust of your customers? They say "medium" and trust you to provide a reasonably-sized coffee, but you sell them a large one instead. Have you tracked how many customers leave their coffee half-finished now that you changed the labels?
foresterh 16y ago
One reason I always say "16 ounce" or "12 ounce". I have no idea if they speak Starbuckian or any other coffeeshop lingo, but 16 ounces is always 16 ounces.
- TorKlingberg 16y ago
  That will not work outside America though.
  - snprbob86 16y ago
    But Starbuck's made up words will? I wonder if the metric system has an analogous unit of measure to the ounce....
rradu 16y ago
This also means that the price of all sizes went up, which must have messed with demand. Was there consideration of possible lost sales?
danohuiginn 16y ago
well, duh. asking for medium is like saying "stop asking me questions, and just give me the damn coffee". I doubt relabelling does you any more good than just raising the markup on your (genuinely) medium coffee. Repeat customers will figure out what size they like, and one-off visitors will, if anything, just feel jerked around.
trotsky 16y ago
If people didn't really want the extra coffee (and it seems unlikely they did), how exactly is this different from "We wanted to make more money, so we raised our prices" ?
- swombat 16y ago
  They were still offering the smaller options. They didn't raise their prices, they just made them more misleading. This is just one of those dark patterns that works and can even be essential for some kinds of businesses: http://swombat.com/2010/12/19/dark-patterns-good-for-business http://swombat.com/2010/12/19/dark-patterns-good-for-busines...
acabal 16y ago
This seems very dishonest to me, and if I was a random walk-in customer of that coffee shop, I'd feel cheated. I have absolutely no idea how many ounces are in a "medium" at any coffee shop, and I don't want to know. When I ask for a medium, what I'm really saying is, "please give me a reasonably sized cup of coffee, not too big, not too small." If I'd have asked for a medium and gotten a super-jumbo-medium handed to me, I'd have felt manipulated in some vague way--as if the big coffee shop knows damn well what a "medium" is, and they know damn well that that's what I want, but they're going to give me their own special interpretation of a "medium," which is more coffee than I want, and also just so happens to cost $1 more. Fuck that, and too bad you didn't mention the name of your chain so that I can try not to visit.
- hrabago 16y ago
  I remember reading about the application of this mindset in retail establishments before. It's also why I never specify a size before seeing the actual cup sizes.
civilian 16y ago
I wonder when they'll make the shift again when people figure out that the "small" is really what they want. Then there can be a "small" 16oz coffee :D
acangiano 16y ago
This is a well known concept in pricing theory. If you have multiple, directly comparable offers, always have an out of reach option. Doing so will automatically lead more people to buy the next, more affordable option.
ookblah 16y ago
ok i feel like a dummy but this doesn't make sense to me. they just relabeled the old large -> new medium but kept the price points the same? so if a medium 12 oz. was $2, and a large 16 oz. was $4, the "medium" $2 cup is now 16 oz. doesn't that mean they are now giving out more coffee for the same price? how does that help their bottom line...
- SoftwareMaven 16y ago
  The price of 12 or 16 ounces of coffee didn't change, just the label on the cup changed. Making up all numbers here, it is like this: Ounces Size Before Size After Cost 12oz Small Extra Small $2 16oz Medium Small $3 24oz Large Medium $4 128oz N/A Large $15 Notice cost/ounce for a particular number of ounces never changes.
hammock 16y ago
I went into Subway today just to get a drink. I asked for a medium (I admit I am in the habit of doing that everywhere, and it's usually a pretty safe option). She pointed to a giant 40oz Big Gulp-looking plastic cup. Apparently "medium" has been growing not just at coffeeshops. The best part is that, as I slurp down my 600-calorie soda, I can read on the side of the cup about how many Subway sandwiches are so healthy and just 200-300 calories.
evo 16y ago
I wouldn't be surprised if Starbucks' actual coffee size naming scheme seeks to benefit from this effect while dodging the flak. Changing the normal offered beverages from "Short", "Tall", and "Grande" to "Tall", "Grande", and "Venti" obtains the same effect as described in this post without being as overt about it. (On the face of it, "Grande" is an odd thing to call a medium beverage in the first place.)

Medium, Please

36 points by illdave 16y ago

rubyrescue 16y ago

what are the margins on a cup of coffee?

epochwolf 16y ago
When I worked at Subway a 32oz soda cost the store around 10 cents total for the soda and the cup. We sold them for $1.45 each. (Approximate, this was 4 years ago) I would imagine plain coffee has similar margins but there is a fair amount of overhead to run a store which is why the markup is so high.
- kia 16y ago
  Drinks is the biggest revenue source for fast food chains.
  - genieyclo 16y ago
    For any food establishment. Or you're doing something wrong.

apinstein 16y ago

I know how and why it works, but some part of me feels that it's improper. I can't be sure because TFA didn't show it, but I'll bet that the store have a display with sizes and prices readily visible. Thus, taking this approach is basically saying "We're going to try to trick you into ordering more than you want, charge you more than you expected, and hope that in aggregate our customers are too lazy or don't care enough about 50 cents to push back. At least for a few years, and by then we'll be much richer." I can just never bring myself to resorting to such tricks. Am I the only one?

michaelbuckbee 16y ago
I think you're overstating the case, things like: Large vs Small beer - http://www.youtube.com/watch?v=1xSDI9Gg63I http://www.youtube.com/watch?v=1xSDI9Gg63I - are flatly unethical. If someone asked for a 16oz Coffee and you gave them 12oz in a skinny cup so it looked taller that would be unethical as well. But, if you have a series of smaller to larger cups lined up on a counter and you ask people which one they want and then give them what they asked for, I can't see that being unethical. To me, this is just another form of advertising.

phylofx 16y ago

"...astonishing..."

shalmanese 16y ago

This is the well known Goldilocks effect: http://www.venchar.com/2004/01/extremeness_ave.html http://www.venchar.com/2004/01/extremeness_ave.html

kunday 16y ago

you should probably read predictably irrational if you have not already..

Adrock 16y ago
Dan Ariely's Predictably Irrational is really good and the very first chapter discusses this exact phenomenon and some of the subtleties surrounding it. He also mentions it in one of his excellent TED talks: http://www.ted.com/speakers/dan_ariely.html http://www.ted.com/speakers/dan_ariely.html

Deestan 16y ago

Aren't you afraid that you are abusing the trust of your customers? They say "medium" and trust you to provide a reasonably-sized coffee, but you sell them a large one instead. Have you tracked how many customers leave their coffee half-finished now that you changed the labels?

foresterh 16y ago

One reason I always say "16 ounce" or "12 ounce". I have no idea if they speak Starbuckian or any other coffeeshop lingo, but 16 ounces is always 16 ounces.

TorKlingberg 16y ago
That will not work outside America though.
- snprbob86 16y ago
  But Starbuck's made up words will? I wonder if the metric system has an analogous unit of measure to the ounce....

rradu 16y ago

This also means that the price of all sizes went up, which must have messed with demand. Was there consideration of possible lost sales?

danohuiginn 16y ago

well, duh. asking for medium is like saying "stop asking me questions, and just give me the damn coffee". I doubt relabelling does you any more good than just raising the markup on your (genuinely) medium coffee. Repeat customers will figure out what size they like, and one-off visitors will, if anything, just feel jerked around.

trotsky 16y ago

If people didn't really want the extra coffee (and it seems unlikely they did), how exactly is this different from "We wanted to make more money, so we raised our prices" ?

swombat 16y ago
They were still offering the smaller options. They didn't raise their prices, they just made them more misleading. This is just one of those dark patterns that works and can even be essential for some kinds of businesses: http://swombat.com/2010/12/19/dark-patterns-good-for-business http://swombat.com/2010/12/19/dark-patterns-good-for-busines...

acabal 16y ago

This seems very dishonest to me, and if I was a random walk-in customer of that coffee shop, I'd feel cheated. I have absolutely no idea how many ounces are in a "medium" at any coffee shop, and I don't want to know. When I ask for a medium, what I'm really saying is, "please give me a reasonably sized cup of coffee, not too big, not too small." If I'd have asked for a medium and gotten a super-jumbo-medium handed to me, I'd have felt manipulated in some vague way--as if the big coffee shop knows damn well what a "medium" is, and they know damn well that that's what I want, but they're going to give me their own special interpretation of a "medium," which is more coffee than I want, and also just so happens to cost $1 more. Fuck that, and too bad you didn't mention the name of your chain so that I can try not to visit.

hrabago 16y ago
I remember reading about the application of this mindset in retail establishments before. It's also why I never specify a size before seeing the actual cup sizes.

civilian 16y ago

I wonder when they'll make the shift again when people figure out that the "small" is really what they want. Then there can be a "small" 16oz coffee :D

acangiano 16y ago

This is a well known concept in pricing theory. If you have multiple, directly comparable offers, always have an out of reach option. Doing so will automatically lead more people to buy the next, more affordable option.

ookblah 16y ago

ok i feel like a dummy but this doesn't make sense to me. they just relabeled the old large -> new medium but kept the price points the same? so if a medium 12 oz. was $2, and a large 16 oz. was $4, the "medium" $2 cup is now 16 oz. doesn't that mean they are now giving out more coffee for the same price? how does that help their bottom line...

SoftwareMaven 16y ago
The price of 12 or 16 ounces of coffee didn't change, just the label on the cup changed. Making up all numbers here, it is like this: Ounces Size Before Size After Cost 12oz Small Extra Small $2 16oz Medium Small $3 24oz Large Medium $4 128oz N/A Large $15 Notice cost/ounce for a particular number of ounces never changes.

hammock 16y ago

I went into Subway today just to get a drink. I asked for a medium (I admit I am in the habit of doing that everywhere, and it's usually a pretty safe option). She pointed to a giant 40oz Big Gulp-looking plastic cup. Apparently "medium" has been growing not just at coffeeshops. The best part is that, as I slurp down my 600-calorie soda, I can read on the side of the cup about how many Subway sandwiches are so healthy and just 200-300 calories.

evo 16y ago

I wouldn't be surprised if Starbucks' actual coffee size naming scheme seeks to benefit from this effect while dodging the flak. Changing the normal offered beverages from "Short", "Tall", and "Grande" to "Tall", "Grande", and "Venti" obtains the same effect as described in this post without being as overt about it. (On the face of it, "Grande" is an odd thing to call a medium beverage in the first place.)