The Price Is Right (Gwen Moritz Editor's note)

Years ago, my husband brought Hunt’s ketchup home from the grocery store and was surprised by my disappointment. “But it was cheaper,” he said, an explanation that would have been good enough on almost any other product. But when it comes to ketchup, I’d rather do without if I can’t have Heinz.

I was reminded of that teachable moment last week, when the only thing that wasn’t perfect about my brother’s traditional Memorial Day feast of fried crappie was, you guessed it, Hunt’s ketchup. What makes some products irreplaceable in the mind of the consumer? Why can some products command a higher price than the other brands on the same shelf? And how much higher can the price be before it backfires?

Pricing, as anyone engaged in a business enterprise knows, is very tricky. It has to be high enough to cover the costs of producing the product or service and to deliver enough profit to make the undertaking worth the effort and risk. But beyond that, pricing can seem almost mystical. Too high and consumers are put off or truly priced out of the market; too low and consumers are skeptical of quality.

There’s a lot of gamesmanship to pricing. The nine-tenths of a cent that is a standard part of gasoline pricing — shouldn’t that have disappeared about three dollars ago? Sometimes Kroger offers products at “10 for $10” when I know full well that the product recently sold for less than $1. Medical bills are an utter fiction, and so is the “sticker price” of college. A few years back, Hendrix College raised its stated tuition dramatically — apparently so that it could then give discounts that made students and their parents appreciate the bargain they were getting.

Even before I read Craig Douglass’ commentary in this issue about the pricing strategy that nearly killed J.C. Penney, I was talking to co-workers about the psychology of discounting prices. One of my colleagues said, “Like the tuna company in ‘Mr. Mom.’” In the movie, Teri Garr suggested that her advertising company’s client temporarily drop the price on canned tuna in order to show compassion for recession-strapped mothers.

Most advertisements skip the subject of price altogether, but television infomercials have made pricing an art form. I confess that I’m often fascinated by the products on infomercials — right now, I’m mesmerized by the NuWave induction cooktops — but I’ve never picked up the phone to order a product that way. Recently I did, however, buy a product that had intrigued me “as seen on TV” because a friend recommended it after his uncle had recommended it to him. That product is the Pocket Hose — I bought it at Bed Bath & Beyond, which keeps me hooked with “20 percent off” coupons that are always honored, no matter the expiration date — and I have to say I like it too.

TV commercials, it seems, can get some people to take a chance, but I’m much more likely to act on the recommendation of someone I trust. This, as I understand it, is the very phenomenon at the heart of Collective Bias, the Bentonville company that is harnessing the word-of-mouth power of a network of hundreds of bloggers. I’m not sure I’ll feel the same way about recommendations if I think the source has a financial interest in promoting the product.


I asked on Facebook for other products that my friends think are worth seeking out and even paying more for, the way I seek out Heinz ketchup. My friends are loyal to Apple products (I’m not), Honda cars and Ford trucks. Photographers seem split between Canon and Nikon. Jif peanut butter has its fans, but so does Peter Pan. (I don’t eat enough peanut butter to tell the difference.) Coca-Cola is The Real Thing, it seems. One of my high school classmates swears by automotive filters by Wix — the kind of brand loyalty that would never even cross my mind. But I can line you up a list of people who will join me in affirming that Q-tips are worth the additional cost. Tide detergent is the most expensive in the laundry aisle, yet one friend insists its familiar fragrance is a cheap substitute for psychotherapy.

Hellman’s mayonnaise, Crest toothpaste, Le Sueur canned peas — you’d think that someone who insists on Heinz ketchup would be similarly finicky about such things, but I’m not. I can, however, say this with complete confidence: The Mr. Clean Magic Eraser, and not the store-brand knockoffs, is the greatest product of the last quarter-century. You heard it from me, folks.

Gwen Moritz is editor of Arkansas Business. Email her at