Aug 17, 2009

Fifth P of Marketing - Psychology

Borrowing this "fifth P" term from my friend Paddy, some more thoughts. My flight to Mumbai was a lesson in this aspect.

The flight takes off, water bottles are distributed. After 30 minutes or so, the air hostesses announce opening of snacks counter. This is a low-cost pay-per-snack airline. The air hostesses quietly and efficiently ask with the nicest smile on their faces, "Sir would you like a sandwich or a cup of tea or coffee". Guys remain guys, many say yes.

One chap, who does not seem hungry, still buys the sandwich. He says his wallet is in the bag and with great difficulty (he is tall) tries to draw his wallet out of his bag which is in the overhead bin. From my seat, he looked more and more like a filmfare award trophy as he bent his elbow. After about 30 seconds, he gives up. The attendant, then tries the same, but in vain. Next, she climbs on the seat side, but is not able to draw the wallet.

Her colleague, with an even larger smile, says, "Its ok Sir, please pay after the snack." The passenger is on cloud nine. Such care, such friendliness.

Passengers on my adjacent seat were thinking of coffee, when suddenly one of them says, "I will have sandwich, I am hungry".

Then, suddenly, one of the passengers started feeling cold. He beeped for the attendant. The attendant comes along and shows the fellow how to reduce the fan on the top. Yeah, right, it is quite incredulous to see 40 something year old man not being able to turn down the speed of the AC wind. That was followed with another 2-3 beeps...someone wants water, someone has a question if he can turn on his laptop...Attendant responds, "Sure sir" , "Yes sir, but please turn it off when landing".

More sandwiches....not that it has any apparent connection to the politeness.

Amazing, how much we people want to behave like babies when allowed to. A flight is the best place to be a baby. I want water, sandwich, it is too cold, too warm, my bag does not fit, can i have aisle seat....sure sure the answer most of the times.

Well, the airlines thrive on such passengers who value-add to their services.

Coming to the mathematical part -

So the sandwich in focus here may be described as follows:
3 slices of bread = 3 Rs.
2 small cube of butter= 5 Rs.
Cheese slice (maybe , I don't know) = 5 Rs.
4 pieces of tomato and cucumber each = 4 Rs.
Ultra Clean kitchen = 10 Rs. (guesstimate)

Qualified chef doing what a 7th standard student can do = 40 Rs. (I am generously taking 10 minutes for assembly of this simple item and Rs. 240 per hour which is quite expensive for this job anyway)

Ketchup sachet = Rs. 5

So this adds up to Rs. 72 per sandwich without building economies of scale into this.

Folks pay upwards of Rs. 100 for this item... this is the magic of the fifth P - psychology.

The 5th P - Psychology is well understood by industries like aviation, hotels / tourism and these days even banking, real estate etc.

(Link to Paddy's article - Consumer Insight )


paddyliveshere said...

Nice observations man. You've been busy on the flight! I also think we still look at flying as a status thing so we think we are being cheap if we dont buy food or carry our own. And thanks for the credit:)

Btw (you may already know this), there's this amazing book called Influence by Robert Cialdini, which demystifies human behavior. There are numerous summaries and articles on it on the web which are informative. I read thru half the book cpla years ago. Am desperately trying to find a copy now.

Siddharth said...

@Paddy - Thanks for the comments. Yes the status symbol approach is quite prevalent. Also, empirically observing, we Indians love eating when we travel. Consider a train or bus journey, most of us want to munch something and a cup of tea every now and then.

I have not read Cialdini but sounds interesting. Will check if I find it here somewhere!


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