Lessons in Pricing from Murugan Idli Shop

Posted on November 7th, 2006 in Random - 0 comments

Agreed I am great fan of food. And more so when the place is real value for money. So I have become a regular at Murugan Idli Shop during the weekends. That brings us to the topic of this post. What can marketers learn from a place like Murugan Idli Shop?

Pricing.

[Useful Wikipedia links for people with little understanding about Idli etc. : Chutney, Idli, Sambhar]
Yes my dear. Pricing. One of the 4Ps on which every marketer tries to achieve control and manipulation. Lets look at the pricing structure on Murugan Idli shop menu. Unlike any other hotel, Murugan Idli shop sells Idlis on standalone basis, so there is nothing like a plate of Idlis. Rather you order the number of idlis you want and they serve you that. 4 varieties of Chutneys and superbly tasting Sambhar come free with your order. Since its an Idli shop, everyone starts with ordering 1-2 idlis. Another reason for that is price. One idli costs you 5 rs. (Just for comparison: A plate of Idlis (2 Nos) in Saravana Bhavan would be 12-18 rs). So essentially they are encouraging people to eat for less. After 2 idlis, people would naturally order a plate of Dosa / Upma / Uthappam. Now this is where the premium is charged. Dosa would be typically 16 rs. Uthappam etc are upwards of 20. All the while you get the Chutney/Sambhar free. Just in case someone wants to add karampodi [A variety of dry chutney] you have to shell out an extra 3 rs. I haven’t seen people stopping after 2 idlis there. They go on ordering a couple of dosas etc. before finishing the dinner. All I can say is innovative and highly effective pricing model.

Lets talk about something else that most of us know. VLCC. Recently I saw one of their schemes in Hindu. The discount offer for women is something like this.

  • If you are between 65-75 Kgs, 5Kg weight reduction free
  • If you are between 75-90 Kgs, 10Kg weight reduction free
  • If you weigh more than 90 Kgs, Call us to get your discount

Now, that is some creativity in discounts.

Barring few industries like Telecom, Airlines etc. I don’t see such effective/creative pricing models anywhere. What is your experience?

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