Tuesday 16 December 2008

Why do many bars charge customers for water but give savoury snacks for free?

The key principle that underpin this effect Complementary versus Alternative usage of the Core Revenue Generator.

In this instance, alcohol is the core revenue generator.

Therefore, bar owners aspire to increase the consumption of the core revenue generator and decrease consumption of alternatives.

Water acts as a substitute to the core revenue generator so needs to be "taxed".

Savoury snacks - complementary products - increase thirst, thus increasing consumption of the core revenue generator.

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