Tuesday, April 04, 2006

Why Watson's Tissue is so thin

Choon Leng was saying that he didn't like Watson's tissue because it was so thin it kept tearing when he wiped his face. Other than uncomplimentary comparisons between his face and sandpaper, the other thought that struck me was one of the small lessons from the Undercover Economist:

Basically, the tissue is designed to be lousy, so that you'll buy the slightly higher quality brand of Watson's tissue right next to it, that costs twice as much. The cheaper one is for the price-conscious people, and the expensive one is for people willing to pay a bit more. Now, the funny thing is, the cost difference between the two brands is probably much smaller than the price difference, and it may cost less than 5cents for Watson's to improve the quality of their tissue, but they won't, otherwise they won't be able to make you pay lots for the other pack anymore!

It's part of this strategy where they deliberately sell one cheaper product to the price conscious, and the higher quality but even more highly marked-up product to the price-insensitive.

(The example given is actually like, the Safeway Select and other housebrands which are sitting right next to the expensive Post cereals and Free Range eggs, where they purposely pay for bad packaging that makes you think the product is dodgy, but I've found that in Singapore I don't really notice the difference, whereas in US and UK I did!)

1 comment:

wandie said...

I miss the mystery meat Safeway sausages.. mmmmmmmmmmm....