Trying to predict consumer behavior

All of us are consumers of many different products and services. Companies spend tons of dollars trying to figure out what we’ll spend our hard-earned dough on. However, I think this is easier said than done, as the behaviors we consumers exhibit are often far from rational or predictable.

There is a blended whisky called Chivas Regal. It’s an OK product but not anything to go crazy over. When it first came out, sales languished since competition is stiff in the blended-whisky category.

Then its owners did something radical: They doubled the price. Once they did this, sales took off and have never looked back.

As a consumer you might ask yourself: How could doubling the price increase sales? This is the exact opposite of what they teach in any basic economics class.

Turns out a lot of people like to give a bottle of whisky as a gift. By doubling the price of Chivas Regal, the receiver of it as a gift knew instantly he had just been given one of the most expensive bottles in the store.

In fact, my wife and I have often noticed that many receivers of gifts in our family — and I’m sure yours too — have no idea of what we paid or went through to give certain gifts and don’t react accordingly. So by doubling the price, Chivas Regal solved that problem in one fell swoop. Brilliant for them, but not so good for those of us who actually buy whisky.

Back in the day, imagine you worked for a beverage company. One day, you walk into the bosses’ office and say, “I have an idea. Let’s sell water in bottles.”

You most likely would have been laughed at or simply brushed off. Think about it — people have potable water for free in their homes.

The bank won’t even loan you the money for a house if it doesn’t have clean, potable water. In fact, New York City where I grew up used to regularly win awards for the quality of its tap water.

But somewhere along the way some executive didn’t laugh, and now bottled water outsells soda in many cases, no pun intended. I know people who live in places with quality municipal water systems who nevertheless buy bottled water as a matter of course because they perceive it to be “better.” Talk about marketing!

Here’s one I’ve never understood. Somewhere along the way, denim jeans started to be sold that were already “faded” or, unbelievably, with holes already in them for “style,” and they ain’t cheap, either. Are you kidding me?

If you want your jeans faded or with holes in them, do what I and other hard-working men and women do: Use them! Between landscaping and woodworking and vehicle maintenance and everything else, I wear out jeans, starting in the knees and moving on, at an alarming rate.

In fact, I’ve been waiting for years for jeans to come with padded knees so it would take a little longer for me to cut my worn ones into shorts or have my wife try to sew them. The thought of paying extra for fading or holes in jeans is just something I’ll never be able to wrap my mind around.

Maybe my problem with understanding consumer behavior is just with me. For example, I made a comment to a female coworker one time that I had gotten a coupon from a local shoe store that promised me a credit after I spent $250 with them.

“This stinks,” I told her. “I’ll never spend that much on shoes by the time this coupon expires.”

“Frank,” she said, looking at me cross-eyed: “That’s what I pay for one pair of shoes.”


The engine in your car needs coolant to keep from overheating. Coolant is generally a fifty-fifty mixture of antifreeze and water. It used to be you bought a gallon of antifreeze and some distilled water from the drugstore when you needed to change it.

Then “pre-diluted” antifreeze started appearing on the shelves of the auto-parts store, often costing, I kid you not, more than the undiluted variety. Just think about that for a moment: Someone figured out they could cut their product in half with water, and then even get away with charging more for it!

No wonder companies pay huge bucks to try to figure out consumer behavior. Who would have ever believed they could get away with that?

Our Jewish friends have a great word for this kind of behavior: chutzpah.

I could go on. We all know a $10 Casio digital watch tells time as well as a Rolex, but that is irrelevant to the people who like to flash their “bling.”

There is a wonderful brand of wines called Charles Shaw that sells for, I’m not kidding, $1.99 a bottle, affectionately known as “Two Buck Chuck.” You can’t get it in Albany but, once you try it, you’ll wonder why you’ve ever paid more for wine.

And you know the majority of Range Rovers, those high-end SUVs that sell for six figures and are advertised crawling over rocks and fording streams, will never see that kind of use and abuse in the real world. But the thought that they can do that stuff — and the image that goes along with it — are apparently worth that premium price tag.

Let me leave you with this: I own a lot of tools but one tool I have not yet purchased is a miter saw, also known as a “chop saw.” At the local Chinese tool emporium, the one that issues those ubiquitous 20-percent off coupons all over the place, I can get not one, not two, but three, count ’em, three Chinese-made chop saws for the price of one good American-made one.

Now I’m not a professional woodworker; I only do it as a hobby and for home maintenance. So maybe the cheap one would be fine. But, if I buy the good one, it’ll last me the rest of my lifetime; I can leave it to my kids; and I can support jobs and industry in America.

Is that worth paying three times more? Tough call.

Predicting consumer behavior is incredibly difficult because the choices we make as consumers often don’t make a lot of rational sense. Just please promise me, whatever you do, don’t buy the 99-cent bottle of off-brand ketchup. Life is too short. Get Heinz and be happy.