According to Warren Buffet, as long as customers have no other choice, product pricing control trumps good management. Buffet is 80. I do not know at what age he learned this concept, but I just learned it, first hand.
Yesterday, my wife and I went to a movie. It was $6 to get in. I was thirsty. I ordered a bottle of Dasani water at the concession stand. The water price was $3.14. “Could I have some ice with my water?” I asked. “No can do,” the attendant replied. “You can purchase a cup with ice,” and she pointed to the Coke cups that lined the back wall. The cups were the same price empty as they were filled with Coke. I pleaded insanity and declined.
I smelled the fresh aroma of popcorn. What is a movie without popcorn? After some discussions with the attendant about the bag size choices, I ordered the smallest size they had. The fact that it took a discussion to determine the smallest bag was not a tribute to management.
Before giving me the popcorn, the attendant rang up the popcorn. I saw the cash register total go to more than $10. My heart skipped a beat, and I felt indisputable palpitations that my blood was boiling. “There must be some mistake,” I said. “How much is the small popcorn?” I asked.
“7 dollars,” the attendant replied. “That is obscene,” I whispered. “I do not set the prices,” the attendant loudly retorted. As an academic riposte, I described the lurid details of the Obama economic plan and that he proclaimed that everyone must participate. I added unequivocally, “A 7 dollar popcorn price is not my idea of participation.”
I asked for a popcorn price reduction. None was offered. I showed my senior card, my AARP membership card, AAA card, American Express card, and my Costco card, but there was no pricing discounts available like you receive from hotels. I even showed the attendant my iPhone and that I could access the Internet. I searched the theater for popcorn vendor competition, but there was none. I asked to speak to the manager. It was all vanity of vanities.
The manager vehemently denied any responsibility for the popcorn pricing. I asked, “If I bought it, but did not like it, could I get my money back?” There were no guarantees proffered. I had walked into the valley of commercial darkness, and popcorn was $7. It was a pupil popper. It was at that moment that I realized that Warrant Buffet was right. I had found a business that controlled pricing, had bad management, and it was doing well despite my unilateral objections.
My rants reverberated from deaf ears. I was compelled to exercise my divine right and I declined to purchase the popcorn. I let my lone voice speak silent volumes about my discontent over the monopolistic popcorn pricing. I asked the attendant to make management aware of how displeased I was with the popcorn pricing. The attendant nodded in apparent agreement, turned her head slightly, walked away and commented, “Whatever.”
The attendant’s comment inferred it was my fault, but it was not. Movie theaters should be required to post a large disclaimer sign that reads, “People with hypertension, prone to dizzy spells, or high blood pressure proceed to the concession stand at your own risk. It may be dangerous to your health.” The surgeon general should investigate this situation immediately. I started to ask for some candy, and then swiftly returned to my senses.
Tonight, I will watch a movie on Netflix ($7.99 per month for unlimited movie watching) and make my own popcorn for 25 cents. While the movie moguls wonder why they are in trouble, Netflix stock has soared to more than $230 per share. Buffet was right, but consumers always have another choice. It’s
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