…Many companies use ‘product sabotage’ to increase profits?

Starbucks Coffee

In what has been called “product sabotage”, many companies, including Starbucks, downplay their best products (at least the best products for the consumers). Starbucks, for example, offers a size smaller than a tall, called “short”. They don’t advertise it on their menu wall, but it’s there, and it even has its own button on the register. The aim of price sabotage is to sell different products to different types of customers. The same theory underlies student and senior discounts, which target people most likely to be on a fixed or lower income. A short drink at Starbucks cuts their profit margin down so they are making less money on each drink they sell. By getting you to choose something off the menu, they are making you a more profitable customer. This may seem like a disadvantage to consumers (and it is if you are unaware of the smaller options) but if companies were not allowed to price sabotage, it would most likely be the cheaper products that would disappear. So learn the real menu to your favorite eating establishment, and it could save you a few dollars down the road.

[Via: BBC News]