Lying Through Her Teeth

            I just saw an advertisement for a teeth whitening product.  In an overly enthusiastic manner a woman said something along the lines of, "and the only reason we can give a free sample is because we know you'll love our product!"  Ever after I saw the inflated shipping charge that might explain it all, I was still unsettled by what I had just heard.
            Two terms I got familiar with earlier today while doing industrial organization work came to mind.  The things we buy can be categorized as either 'shopping' or 'convenience' goods.  Shopping goods are relatively expensive purchases like washing machines or beds that are made infrequently.  These are often classified as durable goods, another way of saying you're stuck with them.  Naturally characteristics like speed, color, fashion-ability, and quality are valued more for shopping goods.  Convenience goods are things you buy regularly and make up a small fraction of your total spending, like toilet paper. Although, I'd  have to say referring to it as a 'convenience' is selling toilet paper a little short.
    Whitening systems from my understanding are actually quite expensive and take a long time to see results. However, they are regularly sold in multiple small parts that you have to buy many of over time. Basically this is a shopping good being sold as a convenience good.  This is a good part of that funny feeling I got while the bad actress on T.V was telling me why her company was offering a $39.95 free sample.
           Experience goods and search goods are another way of classifying the things you buy.  Shoes for example, are search goods because you get to try them on in the store and know exactly what you're buying.  Store brand chili however, you'll have to stomach the risk and buy to find out if its any good. That's why chili would be considered an experience good.  Teeth whitening devices don't claim to work overnight and are a classic example of an experience good.  So why else did that teeth whitening commercial's claim leave a bad taste in my mouth? I realized you can't tell if the product works from just the free sample.  The company wouldn't count on people liking a sample of a product they don't even get to see work.  Maybe economies of scale or a loss leader strategy (selling at a loss to profit on likely subsequent purchases) is really why the company gives free samples.  I don't know for sure, but I'm not buying what she was saying or selling.

Ode to the Margin

Oh margin
Its how I know what I'm charging
When I make my decision
It's the the margin I envision
Oh margin

Oh margin
Credit where credits due
That because of you
Ill know who to give the job to
When A makes 3 widgets
and B only makes 2
Oh margin

Oh margin
When a friend wants one more
Because hes sure that he'll score
Ill remind him hes had a dozen
And that she might be his cousin
He'll insist to stay
And Ill call it a day
But when he calls in the morning
Ill know what to say
You didn't need that last drink
Don't you know how to think?
How good was the last?
Don't you remember the past?
When five was alive
And six was in the mix
Seven was heaven
And eight was great
Nine was fine
And ten is when to end
Marginal cost equals lost
But listen you did not
And eleven was a shot

Now at a dozen
Doing a fair share of buzzin
You stand outside the door
Of said maybe cousin

There in your hand
Is unlucky thirteen
And you drank it down quick
Because you weren't so keen

So here's my advice
I wont say it twice
The beers not such a bargain
When its your cousins room that you barge in
You got to think at the margin
Oh margin