Dear Economic Eye...

Question from Johanna (South Africa):

Dear Economic Eye, thank you so much for helping me understand why Grooms might have to pay more for their honeymoon than Brides. I have another question and was wondering if you could help me with that too:

Yesterday I purchased toilet paper (what an exciting life I lead!) and noticed that the price for 4 rolls was simply four times the price of a single roll. There was no bulk buying discount at all. I have noticed this before as it seems to apply to many items in Africa (ranging from washing powder to coffee) and was wondering why that might be the case? In Europe you almost always get a discount if you purchase more – why are there virtually no benefits of buying bulk in Africa? Could it be to do with lower average purchasing power?

Your biggest fan,

Johanna

PS: Miss you!

Previous answer from the Economic Eye:

Today, we have a question from Jo in Africa. She asks: why do grooms pay more than brides?

If I speculated, I would think about:

On the supply side:

If the company is doing cost-price pricing and grooms consume more (for example, drink more, eat more) then perhaps the company would charge different amounts. This is not an ideal pricing model, of course. Far better to respond to the customers, so:

On the demand side:

• Perhaps brides and grooms pay separately and they have different price elasticities - i.e. brides are slightly more cautious about how much they spend on honeymoons. Women earn less than men and this is a luxury item.
• Perhaps the groom pays for both and is simply less willing to spend money on his new wife than on himself (Doesn't seem like a great start).Perhaps the parents pay separately and parents of brides are less willing to pay more than the parents of the groom.
• Perhaps the parents pay separately and parents of brides are less willing to pay more than the parents of the groom.
• Perhaps the parents of the groom pay for both and the groom's parents are less willing to pay for the bride.

Interestingly, there is very little difference between the top and bottom prices for either the bride or groom. But the cost goes up more for the groom than for the bride (R900 from the cheapest to most expensive option verses R470) and ratio of the cost for the groom compared with the bride goes up from 138.1% to 140.8%.

If they are paying for themselves, this would support the idea that females are more price inelastic than males. Interestingly, if the groom is paying for everything, it suggests that he has a higher price elasticity for his bride than for himself - i.e. he is more wiling to pay to inch himself up the luxury chain than he is for his bride. Of course, assuming a honeymoon is for two, if only one person is paying then this is all about the framing. The sum still has to be paid. That makes the insights quite interesting (assuming the marketing department know what they are doing).