Amazing little discussion today, which brought forth the consumer perception about pricing.
A guy walks upto the apartment across the road & offers to remove the bee-nest. He gets the job for a small sum of money (not sure how much) and the deal says, he will get to keep the honey also. He comes over to our place to ask for a bucket (to collect the honey).
Dad gives him the bucket- he is back in 15 minutes with almost 20 litres of fresh pure honey. Wants to sell it to us & the neighbors & call it a day.
Bargaining starts & I watch as his would-be-customers negotiate for the right price. They want a steep discount coz they know he has already made a neat sum by removing the bee-nest . The market rate is Rs 200/- per litre & they are not willing to pay more than Rs 80/- (more than 50% discount) !
Once the deal is closed, I try to understand their logic of asking for such a steep discount. I thought its the fact that this guy is not really in a market with too many customers, so given his limited options he can best sell to those who know the honey is fresh etc. But they stick to their logic, that since the man made some money (mind you- none of them know how much he made. That is if he made any money at all) by removing the nest, he has not invested time & energy in rearing those bees.
How do they know that when they pay Rs 200/- in the market, the guy selling it has actually worked harder than this chap. Do they want to reward labor or pay the price thats right for fresh honey? It seems as consumers our satisfaction levels are dependent on the margins our suppliers have . Is this why we have advertisements & neat packaging options- so that our mind can somehow stop doing the margin calculations & be happy with the purchase.
Funny how the human mind behaves.