Financial Head Scrachers

Financial Head Scratchers: Always Buy More Beer

I was in the liquor store over the weekend picking up some adult beverages when I came across the picture above in the display cooler. On the left is a six pack of 12 ounce cans, and on the right a six pack of 16 ounce cans.

The fact that they were the same price had me scratching my head.

The six pack on the right represents 1/3 more beer than the package on the left (96 ounces vs 72 ounces).   Without hesitation, I selected the 16 ounce cans and headed to the checkout counter. But on the way home I couldn’t help but wonder why these two products would be the exact same price.

Here’s what I came up with:

• Cost of Production: Maybe the cost of manufacturing represents a much higher percentage of the cost than the actual product inside the can, resulting in a similar cost.
• Popularity of Product: Working with computer servers, I know that the more you can mass produce something, the less it costs per unit. As sort of a spin on the first point, maybe the larger cans are much more popular, bringing down the price per unit allowing the manufacturer to price them equally.
• Temporary Price: Maybe the manufacturer is gently guiding consumers to the larger product, getting them used to the idea of buying the larger cans. They take a slim profit margin now, and then later they discontinue the smaller cans and jack up the price of the remaining product. I know that’s a cynical perspective, but manufacturers do some questionable stuff to increase profits.
• Retailer Sets The Price: Maybe the retailer just isn’t selling much of the larger cans, and is offering them at a discount to move the product.

The other thing that had me confused is why anyone would choose the smaller cans and deliberately take home less product. The only thing I could come up with is some people may not want to drink that much beer at a time, or a can that size would get warm before they finished it.

I can safely say neither of those applies to me.

Have you ever seen two products of different sizes priced the same? Would you ever choose the smaller product in such a situation?

Brought to you courtesy of Brock

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Brock Kernin

Brock is a software engineer by day and personal finance blogger at night. He is a fitness junkie and enjoys grilling and smoking meat. Married with two children,  Brock strives to improve his skills as a husband and father, and is always on the lookout to stretch his family’s budget as far as he can.