2008-06-17

The Price Of Your Favorite Color

“I had no idea I was being a sucker,” I wrote in my post on how coffee shops and other retailers root out the areas in which I am less likely to notice price variations. Since being a sucker is not one of my favorite things to do, I’ve continued to read with fascination about other ways in which retailers figure out where or how they can charge consumers a higher price for something that doesn’t cost them any more.

My new discovery: color.

The book, The Economic Naturalist, by Robert Frank, described its assessment of the question, “Why does Apple sell its black laptop computers for $150 more than for otherwise identically configured white ones?”

Apparently, in July 2006, the Apple website listed the price of a 13” MacBook in white at $1,299 and the price of a 13” MacBook in black at $1,499. But the MacBook in black had a hard drive with an additional 20 GB. That explains the $200 price variation, right?

Well, the book notes that you could actually get the MacBook in white with the larger hard drive (the additional 20 GB) as an option, for an additional $50. Everything else was identical between the white and black versions. So in the end, the black version cost you $150 more.

I thought that was pretty interesting. Since the date of the example was from a couple of years ago, I thought I’d mosey on over to the Apple Store website to see if things have changed since the time of the example in the book (2006)—or since the book was published (2007).

Clicking through to get to the MacBooks, there were three MacBooks featured on the main MacBook page:

  1. 13” MacBook in white with a 2.1GHz processor;
  2. 13” MacBook in white with a 2.4GHz processor; and
  3. 13” MacBook in black with a 2.4GHz processor.

The first option had different, lower-end options on all the measures listed—so I ignored that one and compared the other two. Those two were nearly identical:

APPLE MACBOOKS

13 inch: white
2.4 GHz

13 inch: black
2.4 GHz

2.4GHz Intel Core 2 Duo
2GB memory
160GB hard drive
Double-layer SuperDrive
Ships: Within 24 hours
Free Shipping
$1,299.00
or as low as $31 a month

2.4GHz Intel Core 2 Duo
2GB memory
250GB hard drive
Double-layer SuperDrive
Ships: Within 24 hours
Free Shipping
$1,499.00
or as low as $36 a month

The difference? Once again, the hard drive: 160GB vs. 250GB. Again, it looked to me like that was what was driving the price differential.

So I clicked on the 13” white. Just as in the book’s example, the hard drive was a configurable option. The upgrade option?

“250GB Serial ATA Drive @ 5400 rpm [Add $100].”

In other words, if you make all of the stats and features identical, the 13” MacBook in white is listed for $1,399 and the 13” MacBook in black is listed for $1,499—a $100 price premium to pick black.

The trick here is that you have to know that this type of pricing may be going on—and work your way through the configurable options for each model to see if there is a less expensive option that suits your needs (assuming for the moment that you can get by with a different color).

Granted, color choices can mean different things in different contexts. For many, the choice of a laptop in white or black may only be a mild preference. It could be a bit different to have to drive around town in a car that’s an electric lime green, when that’s so different than your personality that it makes you uncomfortable; and colors in cars can have practical effects as well (with certain colors showing dirt more readily than others).

But for me, this is just like the coffee pricing example—a reminder that retailers are quite sophisticated in determining where and how you are willing to pay more. If I’m willing to pay more for a certain color, that’s one thing—but it looks like I’ll have to be more diligent to at least be aware that’s what I’m doing!


Related Posts:

How Much Is That Coffee In The Window (How Coffee Shops And Others Sneak Past Our Frugality)

How The Word “Free” Makes Us Lose Our Minds

Keeping Up With The Joneses Redux — Real or Imagined?

Einstein’s Theory of Frugality in Shopping

24 comments:

Post a Comment

Comments are what make lots of blogs go 'round. Thank you for participating in this blog by adding a comment!

Also, my apologies. The comment spam coming into this blog has really been on the rise, and the word verification feature does not seem to be slowing it down very well. So for now, I am trying the addition of a registration (OpenID/Google/similar) requirement for leaving comments.

 

Original design by Linda of RS Designs.

Some hacks and functionality added by blog author with tips and code from
Blogger Buster, Hackosphere, and Blogger Accessories.