Here’s an interesting example of potential demand shaping I ran into at a pizza joint near work.
Now, I’ll admit that Bill’s Pizza (note the sad missing apostrophe) was probably not attempting to demand shape with this promotion, but in effect they have. By offering a lower price earlier, they are essentially encouraging early orders, and presumably less demand around 9pm when they want to clean up and close. The delta between the best price and worst price is significant – an 80% premium to order at the last minute versus the first.
This kind of variable pricing might be a great way to smooth out the lunch rush – make it more expensive from 11:30 – 1pm, but somewhat cheaper just before and after. And a smaller rush means less people needed to handle peak hours. A creative way to demand shape that gives the customer something for changing their behavior. This is quite unlike the earlier experience I had with Intuit that I wrote about where the “don’t call us, we’ll call you” mechanism didn’t so much shape demand as it forced me to sit around my house. In Bill’s Pizza’s case, you can still get a pizza anytime you want, but at least you are encouraged to order earlier.
Posted on May 10, 2010
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