On a recent trip to Paris I was staggered to discover the huge variation in the price of a humble cup of tea. Who would have thought that a pot of boiling water and a handful of tea leaves could command a price of almost 5 Euros?
What pricing strategy are Parisienne restauranteurs and bar owners subscribing to? Is it simply the obvious ‘rip off the tourist’ strategy or something altogether more sophisticated?
I was particularly taken by one establishment that displayed no less than three separate prices for a cup of tea. The price got progressively higher the closer you sat to the main road. To enjoy your beverage taking in the full ‘Parisienne pavement experience’ you could pay almost twice as much as sipping your tea at the bar. I have to admit to being impressed by the use of micro location as a price differentiator; clearly Parisienne restauranteurs know their customer base well and are cleverly commanding a premium price for a commodity product.
Secretly though I was pleased that it was a cold day; I was more than happy to sit at the bar and take advantage of the minimum price of a cup of tea. Now, perhaps if they really thought it through they would take their pricing strategy to a whole new level by reversing the structure on a cold rainy day. Or perhaps there aren’t that many sad British tourists who can’t survive more than an hour without a cup of Rosy Lee, to make using the weather as a pricing factor worth while!
You’ll find more in-depth information on pricing strategy at thepricingjournal.com or get in touch if you’d like to discuss your pricing strategy over a cup of tea!