Why Do People Struggle So Much With Snack Prices?

[PurpleDragon]

Honestly this whole argument is moot actually. Disney is not ripping anyone off, there are water fountains all over every park and resort that are completely free. Yes, they charge $3 for a bottle of water, but it is by far the only choice. If people are willing to bypass a free water fountain and instead choose to pay $3 for a bottle of water then that is solely on them. There are tons of beverage options all over the parks, some are overpriced some are not, it comes down to the choices the guests choose to make.

 

[Chef Mickey]

Actually.. but your own argument, if everyone DID do something about it, the prices would change. The problem is when the bulk of customers just roll over the change is seen as accepted and the process repeats.

You did set the tone that if you aren't OK with the prices, then something is wrong with you. People in this thread even go as far as the cliche 'maybe a disney vacation isn't for you'... which basically says "If you care about value, or your money, a Disney vacation isn't for you".



I'm not an uninformed customer - I've done manufacturing, I've done product development, I've done sales, I've done marketing, I've done pricing. I know the concepts in play. And I also know the consequence of 'captive audience'.

Just because you CAN do something doesn't make it the right thing to do by your customers.

Yes Disney has tons of overhead that is not directly monetized and needs revenue from other activities to fund the beast overall. But your HM analogy falls down when you compare Disney against itself. The HM has been there all along, and the model that supported it is generally the same... yet price escalation in things like food have outpaced the rest of the model and Disney's own fiscal results show higher margins. So it's not 'we gotta pay for this overhead' - its 'what can we charge and keep the chart going the correct direction'

BTW, you aren't correct about Disney's margins. Disney park margins HAVE been higher in the past and are absolutely NOT the highest they've ever been. I know they make more TOTAL dollars than before (a lot of factors go into that: More guests, inflation, etc), but their margins have been even higher in the past. Remember, margin is different than total profit. To put it simply, they've "ripped people off" more in the past than they do today.

Operating margin was around 18% in 2002....it was ~18% in 2015. It was over 20% in 1999.....meaning they made more profit per dollar 17 years ago.

 

[Mawg]

I won't pay 3$ for a bottle of water. I won't complain about it either. I will pay 4$ for an Ice Cream and 7$ for beer. But, I will not pay for water, at a movie, at a stadium at an amusement park. I won't even buy bottled water from Costco. The water industry is the biggest rip off. I have this thing and they are everywhere called a tap. I don't care what it taste like, I'm going to use it. Plus at Disney, you can get free water at any counter service restaurant. We go with an allowance of 1 4$ snack a day per person, unless we are skipping a meal and just snacking that day. I don't see anything wrong with the cost of these snacks at Disney, except for bottled water. But I have a problem with bottled water anywhere I go.

 

[flynnibus]

Yet, still can't answer the question. And didn't you just do the same thing with your response? LMAO!! Please excuse me, I have to go complain at the bar I was at last night about how much my beer costs.....you know since that bottle is so much cheaper as an 18 pack breakdown at the store.

1) You brought up the grocery store comparison - no one else. So you can stop trying to ask me to justify that argument - I didn't make it
2) If you just pay whatever is charged and never care or include that in your decision about patronizing that bar.. prices go unchecked and you'll be broke. The reality is you have evaluated the price and decided you are willing to pay it. So you do care about the price, and you have made a decision to pay it. If you chose to voice your concern over the prices is your personal decision. But if you never let the business know your concern because you don't voice it and you continue your spending habits.. how is your concern supposed to be known?
3) We all know charging $3+ for a bottle water is not based on COGs necessity - its a market tolerance price.

 

[flynnibus]

They don't complain about the movie theater prices because there isn't a forum available to vent about getting "bent over". I totally agree with you though

So the world is defined by your own horizon.. well done.

 

[flynnibus]

Well if people were more aware of the bringing your own water bottle rule then this whole thing would end up being a non issue. Whenever we go to the parks, instead of bringing a water bottle, we buy a single $3 bottle of water and just refill it all day. We did this each day we were in the park so we ended up only paying $3 a day for our water intake.

The $3 bottle of water is just an example - not what the concern hinges on. We call this missing the forrest for the trees..

 

[Wdw62114]

No, Every poster on every forum is right about everything

 

[flynnibus]

If companies screw up, they are punished by consumers

Not when your customer blindly follows which is your entire argument of 'well place XYZ charges that, so its fine here". That model is unsustainable because businesses will just leapfroging prices with each other. Its this stupid train of thought that allows people to think paying $8 for a coke isn't THAT bad because it's $6 at the other stadium". This psychology is flawed and yet customers fall for it day after day.. this thread demonstrated it on page one.

Your thesis that Disney isn't doing the "right" thing is completely subjective. Who defines right?

I'm talking about the corporate ethos and their position for corporate responsibility. The mindset of 'profits above all else' and 'maximum shareholder return' are only examples of corporate strategy - it is not the ONLY one.

Hanging the entire discussion on the price of a bottle of water is shortsighted and argumentative. It example - not the scope of the issue.

 

[Wdw62114]

If you really wanted to do it, you'd pay for it regardless of price. If you're not doing it, you want kind of want to do it, but not enough to pay for it. That's pretty much how it works for everything.

The job of any for profit company is to extract as much of the consumer surplus as possible.

Example: You are really thirsty and you want a Coke, pretty bad. You see Disney has a coke for $3. You buy it. After that first sip, you say...man, I would have paid $5 for this. That means there is $2 in consumer surplus.

Conversely, if you see the Coke for $3 and are only willing to pay $2 at the moment, you didn't want it that badly.

This is from another thread and very well said. Explains exactly why Disney and other companies charge what they charge.

 

[PurpleDragon]

The $3 bottle of water is just an example - not what the concern hinges on. We call this missing the forrest for the trees..

Not really, that was the most obvious complaint of them all. People have no problem paying $10+ for drinks/snacks at sports arenas, concerts, movie theaters, and various other venues. Why is it that because the same thing happens at Disney that its outrageous? Its standard business practice, most of it has to do with managing overhead. While their cost on the drinks and snacks are pennies compared to what their charging, the cost to ship it, pay cast members to prepare it, serve it, clean it up, etc.. has to be accounted for some how. Also they've got to make some amount of profit out of it to justify the cost of all that I mentioned above. Is it fair to the consumer? No! Will anything we do change that fact? No!

The only way to force Disney to lower prices on their snacks and drinks is to coordinate a massive nationwide strike and get at least 50% of all Disney guests to participate, even then its doubtful that management would even care or notice.

I agree with you that the profit minded business practices that are used all over the world that result in this sort of thing are ridiculous and need to stop. But until a much larger part of the population wakes up and realizes that something can be done to change the status quo, we're stuck dealing with it.

 

[flynnibus]

BTW, you aren't correct about Disney's margins. Disney park margins
HAVE been higher in the past and are absolutely NOT the highest they've ever been

You should really stop with the strawman arguments and inserting your own arguments I've not made claim them as mine. I never said anything about 'highest they've ever been'

And when I look at Disney in the past... you go back to pre-eisner, or 84-94, and then after 94 is roughly the same through around 2007.

And you don't need to explain the difference between gross and margin - I'm a big boy.

 

[xdan0920]

Not when your customer blindly follows which is your entire argument of 'well place XYZ charges that, so its fine here". That model is unsustainable because businesses will just leapfroging prices with each other. Its this stupid train of thought that allows people to think paying $8 for a coke isn't THAT bad because it's $6 at the other stadium". This psychology is flawed and yet customers fall for it day after day.. this thread demonstrated it on page one.



I'm talking about the corporate ethos and their position for corporate responsibility. The mindset of 'profits above all else' and 'maximum shareholder return' are only examples of corporate strategy - it is not the ONLY one.

Hanging the entire discussion on the price of a bottle of water is shortsighted and argumentative. It example - not the scope of the issue.

You are banging your head against a 9 foot thick, steel reinforced, kevlar coated cement wall. The other side is basically saying it's GOOD for Disney to price gouge captive customers. How can you possibly argue with that mindset?

 

[flynnibus]

People have no problem paying $10+ for drinks/snacks at sports arenas, concerts, movie theaters, and various other venues

No problem?

The idea that people ultimately purchase something means they have 'no problem' with the price is fundamentally flawed and disingenuous.

When people join the army through conscription.. the fact they are in the army does not mean they have no problem with conscription.

 

[flynnibus]

You are banging your head against a 9 foot thick steel reinforced, kevlar coated cement wall. The other side is basically saying it's GOOD for Disney to price gouge captive customers. How can you possibly argue with that mindset?

It's great to have them dump their hot mess out in front of everyone to see and see how they actually justify it.

 

[Filby61]

...Some people (like myself) don't care about $3 water or $4 ice cream because we understand it's a way for parks to make money and it offsets the value of the park entry ticket.

Defenders of Disney often cite the pixiedust fantasy that Disney raises prices on item A to keep prices lower on item B. In point of fact, the outrageous markups that Disney slaps on in-park food and beverages don't "offset the value" of anything. Disney maximizes the price on everything they sell in the parks, from tickets to t-shirts. Management is constantly searching for ways to generate larger cash streams from the same products -- all the while slashing operating costs to the bone (now more than ever, with Chappie) on every line item that their brigade of beancounters can find.

If you want to start talking about fair, many companies rip you off much harder than a $3 bottle of water on a hot day. Make a list of the companies ripping customers off and Disney is still a ways down the list. Apple, Microsoft, Pfizer, Visa, and just about every bank are destroying you...

That's another commonly heard defense of Disney. The reality is that cherry-picking scummy companies to show "Disney isn't as bad as them" is not only a poor defense of Disney, it's a guaranteed backfire -- it highlights how far Disney has fallen in its attitude toward its customers, and how much it has become like other arrogant, rapacious Wall Street corporations.

 

[PurpleDragon]

No problem?

The idea that people ultimately purchase something means they have 'no problem' with the price is fundamentally flawed and disingenuous.

When people join the army through conscription.. the fact they are in the army does not mean they have no problem with conscription.

My whole point is that people are used to the status quo and thus don't question it. People don't think they can do anything about it and in turn have a "why bother" attitude. When more people finally realize that their wallets have more power than anything else to affect bad business practices and price gouging then something can be done about it. Until that day the few of us who are sick of it can only sit back and and do what we can to avoid/deal with it. I know it sucks but that's the truth of it.

 

[raven]

You have to remember, Disney is also the leader in the industry. As soon as they raise prices on anything, everyone else does the same.

 

[lazyboy97o]

Kind of funny that people pitch a fit about $3 for a bottle of water at WDW, but yet no one bats an eye at the $5 drinks at your average movie theater. I guess it comes down to what people are exposed to most. A lot of people frequent the movie theater on a regular basis and the pricing is nothing new to them, it something that is pretty much expected at a movie theater. But WDW people only visit once every few years at most, so people are often surprised by the higher prices in comparison to what they normally see outside of the parks.

Your obliviousness to something doesn't mean you can just make up a situation and proclaim it as true. The movie theater business sucks and a prime reason is because people don't like the prices.

 

[Wdw62114]

And the most funny part about all this is that all these posters whining like babies about how much Disney is ripping them off, they still go to Disney, and give them money. Im curious what resorts they stay at when they go. And curious if they buy the dining plan.

 

[lazyboy97o]

And the most funny part about all this is that all these posters whining like babies about how much Disney is ripping them off, they still go to Disney, and give them money. Im curious what resorts they stay at when they go. And curious if they buy the dining plan.

You know everyone's activities?