June 18, 2019

Five varieties

Sent by Jonathan Stark on June 20th, 2019

Friend-of-the-list Marcus Blankenship sent in this fun thought experiment for your enjoyment (shared with permission, obis):

Imagine you sold a product in a storefront, on Main St., USA. You carry a product which comes in 5 varieties, each with a different name. You package and sell each variety in bags which weigh 12oz. People of all walks of life come into your store. You know that 99% of your customers cannot tell the varieties apart in your store, except for the name You know that 99.99% of your customers cannot tell the varieties apart when they use them. Your cost is the same for each variety. How should you price each variety? Best, Marcus

There’s no right answer, so just hit reply and I’ll share my favorite suggestions with everyone here in a day or two.