World of India!: The 'God knows how they came up with it?' pricing model e

World of India!

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The 'God knows how they came up with it?' pricing model

When I studied marketing during my MBA, we were taught the funda of psychological pricing. We have all seen it in our daily lives. Goods or services priced below what the seller determines is the psychological price line of resistance, beyond which the customer would not buy or would think twice, before buying a product/service. So if that price line is deemed to be Rs. 100, the seller will price it at (say) Rs. 99, and so on.

BATA shoes pricing strategy is based almost exclusively on this concept and is almost legend in marketing circles to the extent they take it- shoes priced at (say) Rs. 499.99/-, for example. So much so, that Bata's pricing has become the butt of many a joke.

But now I have found a tough competitor for Bata, and this entity not only believes and practices psychological pricing, it also follows 'the god knows how they come up with that' pricing model. You guessed it right. Whenever anything can be described as 'God knows how...'- it has to be the Indian Government !

Some examples of inane pricing I recently encountered :

- Scene : Mumbai-Pune expressway; Status : A serpentine queue of vehicles at the toll booth; Price of one way coupon: Rs. 118/-. Nice and round isn't it? Not Rs. 100/-, not Rs110/-, not even Rs. 115/-..
.arre, 120 hi le lo yaar...! The result is the inevitable time taken to give correct change or collect return change.

- Scene : Govt. glidinng school, Hadapsar, Pune; Status: a 1 hour mandatory wait to take a joyride on Sunday; Pricing: Rs. 188/- per 10 minute ride; Question to the administrator: Why Rs.188/-, why not Rs. 190 or even Rs.200? Answer : A blank stare. The implication:
Abe Ch***** , that's why we are a Govt. agency.

- Scene: Pune-Satara expressway; Status:A serpentine queue of vehicles at the toll booth; Pricing : Rs.11/-

And I can go on and on...but you get the point.

My theory is that some Sarkaari Babu must have spent quite some time doing complex calculations based on a pre-determined time when they would have to break even. Then based on the expected volume loads & costs, the price required to be charged must have been calculated. So if that price came to Rs. 118/-, that is what needs to be charged and not a penny more or a penny less. If he does, who knows, what sort of inquiry commission might be set up to investigate this 'irregularity'?

But then we must take solace in John F. Kennedy's observation- "
My experience in government is that when things are non-controversial and beautifully coordinated, there is not much going on”. If that truly be the case, I would happily pay the exact change for Rs. 118/-, every time, for the rest of my life!


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May 25, 2007 11:40 AM

Have you come to know about this yet?

Alas, India shall be ruled again by the Westerners - this time, maybe, by Italy :-\)    

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