“Will you pay more for those shoes before 7
p.m.? Would the price tag be different if you lived in the suburbs? Standard
practices and simple discounts are giving way to far more exotic strategies
designed to extract every last dollar from the consumer”
By: Jerry Useem
Level of difficulty: ****
BEFORE YOU READ
·
The text has an audio version the
link to which is provided. Listen carefully reading at the same time. I have
broken the text down into sections. While you are listening, see if you can
determine how I did so and how many sections there are. You will have your
answer when you have completed the questions.
ADVICE
You are advised to download the app so as to be
able to listen to audio versions of the texts in The Atlantic. The link is in
the text.
WATCH AND LISTEN
QUESTIONS
1. Read the first six paragraphs of the
text and answer the questions.
·
The
offering of certain products to consumers at radically different prices at the
same time of the year is not as bizarre as it may seem because it is, in fact,
……
·
The
purpose of the above is to determine…(Be specific)
·
The
reason companies need to carry out such experiments is the advantages presented
by…..
·
The
example of a can of soda and that of the Google headphones prove that: Mark the
one that doesn’t fit.
-
Economists
are getting much better at enabling companies to make a profit
-
The
ways consumers shop help to determine market trends
-
Nothing
has a fixed price any longer because demand fluctuates
-
The
increase in the number of shoppers is providing economists with more data
2. What subtitle would you assign this
section of the text: the price war / pricing: not as easy as it looks /
consumers versus economists / modern technology and pricing.
3. Continue reading as far as “But in
the 1990’s…” and answer the questions
·
The
aim of the fixed price policy championed by conservative religious groups was
to bring peace to the marketplace / simplify buying and selling / make buying
and selling more ethical / make buying and selling less exploitative.
·
We
understand from the case of GM that companies didn’t give up without a fight
/ found a way round the fixed price policy/ tried to provide everyone with a
car / classified society according to their earnings.
·
What
powerful desire of shoppers lead economist to rethink their views on value?
4. What subtitle would you give the
section you have just read: peace in the marketplace / fixed prices whether
you like them or not/ fixed prices for appearances’ sake/ there is a way round
everything. Be very careful.
5. Continue reading up to “By the early
2000’s…” and answer the questions:
·
The
increased availability of huge amounts of data affected pricing in
that…..started to play less of a part in the determining of the price of a
good.
·
The Jewel data proved / disproved
earlier experiments with left digit bias by indicating that the effect….
6. What subtitle would you give this
section: data versus consumers/ data versus intuition/ data versus the
market / data versus Nagle.
7. Continue reading as far as “As this
new world began to take shape…” and answer the questions:
·
What
does the phrase “gravitational pull” refer to? The pull of whom, in what
direction?
·
What
was the attraction of corporations to academic economists?
·
The
end result of the experiments that produced data was ….
8. What subtitle would you not give this
section of the text: the ultimate price fixing/ academia and corporations
join forces / the pull of big data / the sky is the limit.
9. Continue reading as far as “This
could be seen as…” and answer the questions:
·
Which
sentence in this section best expresses the main idea?
·
The
examples in this section prove that the customer is always right / big data
works both ways / consumers are not idiots / there is still justice in the
world.
10. Read as far as “It didn’t have to be
that way…” and answer the questions:
·
The
current price system has a lot in common with the stock exchange as…
·
The
reason for the above system was the fact that companies were trying to avoid…
·
The
looming danger of bankruptcy sets of a chain reaction:…
11. Read as far as “Where does all this
end?” and answer the questions:
·
What
marketing ploy employed by grocers is Amazon employing with great success?
·
Amazon
made a profit on its sales of Samsung televisions despite the 100 dollar drop
in price because…………………………………
·
The
use of various premade algorithms to set prices can have a knock on effect:
……..
·
The
above proves the necessity of ……………………………, which means algorithms cannot be
left to their own resources.
·
How
does the writer support his contention that pricing is a very complex operation
in the modern business world? By pointing to the application of…..
12. What subtitle would you give the
section you have just read: retailers hit back/ the age of algorithms/ from
grocery stores to big business/ Hariharan’s solution
13. Read as far as “But a different theory…..”
and answer the questions.
·
By
providing customers with the complete picture, Everlane was trying to…
·
Why
Did Everlane take the seemingly illogical step of providing customers with the
three options?
14. Read the text to the end and answer
the questions.
·
What
is the retailers’ “holy grail”?
·
The
walk-away price of every single buyer can be determined in one of two
ways:………………….or/and…………………..
·
The
purpose of the research in Catalonia was to prove…..
·
The
major disadvantage of the ways to combat price fixing is that though affective
they are…………………
·
Patten’s
attitude to shopping seems to support the contention that…………………………………….
WRITING TASK
To what
extent do you agree with the idea that retailers are treating consumers like
idiots? Write an argumentative essay in which you support your opinion and
refute the counter arguments.
HOW ONLINE SHOPPING MAKES SUCKERS OF US ALL; KEY AND TEACHERS’ NOTES
1. A price experiment
The price that will extract the most profit from consumers’ wallets
Online comparison shopping
The last
2. Pricing: not as easy as it looks
3. Simplify buying and selling
Found a way round the fixed price policy
The desire (instinct) to best their neighbours
4. Peace in the marketplace
5. Intuition (The head merchant will
fit too but this is not in fact the correct answer as he probably continued to
determine prices but based his decisions on data)
Disproved, of ending prices in .99 was huge in grocery stores
6. Data versus intuition
7. The pull of academic economists
towards corporations
Pricing, people, behavior, reputation – the things that have always set
economists aglow – plus the chance to experiment at a scale that’s unparalleled
The optimal profit maximizing figure
8. The sky is the limit
9. The first
Big data works both ways
10. Prices are never set to begin with
and can fluctuate hour to hour and even minute to minute
Bankruptcy
Expenses like staff, training and customer support are slashed; profit
margins keep falling nonetheless and a death spiral ensues
11. Identifying goods that loom largest
in consumers’ perception and keeping their prices carefully in line with
competitors’ prices, if not lower while allowing the price of everything else
to drift upwards.
They hiked the price of HDMI cables needed to connect the TV by about
60%
It could devastate a retailer’s bottom line
Human oversight (Guardrails is not the answer because it is stated in
the question that algorithms cannot be left to their own resources)
Game theory to pricing
12. Retailers hit back
13. Capitalize on consumer backlash to
retailers’ ever more vaguely underhand tactics
To give customers a glimpse of how stuff gets made, how workers get
paid, and other things not typically visible on a shoebox or a sweater tag
14. Perfect price discrimination
Demographics and people’s web browsing history
That personalized pricing was feasible
Complicated
(There is a finite amount of uncertainty we can absorb, a limit to how
much we can check the ticker to see whether the Swiffer’s price is up or down
this morning;) somewhere in us is a shut-off point
