Profits de-pressed?

The other day, I had gone to collect a few clothes I had given for pressing from the ironing shop back home. After collecting my clothes, I asked how much I was required to pay. One of the people in the shop, apparently one of the new recruits said that it would be Rs. 30/-, at the rate of 3 per piece. As I prepared to pay the money, one of the others at the shop, an old timer, asked me to wait for some time.

There was another customer at the shop, upon whose departure he repaid me Rs. 5/-. When I asked him what was happening, he said that since my father was an old timer, he was charging us lesser than others.

While like any other customer I was happy at the bargain made, no matter how small, as I left the shop there were a number of questions that I was left pondering over.

Firstly, is it really a feasible practice to carry out this sort of price discrimination between customer groups?

Next, it is not unusual to see people cribbing over delayed deliveries of their clothes at this very shop, arising from the very high load due to the shop enjoying a virtual monopoly in the area. Such being the scenario, is it really worthwhile to retain the so-called ‘old-timers’? This is especially relevant with the growth of new multi-storied apartments in our locality and their occupants whom the shop may be missing out on due to delayed deliveries.

Further, with the change of generations, the willingness to pay among customers is also changing – just as I would have not realized the difference had he charged me at 3/- per piece. In that case, is the shop not losing out on substantial consumer surplus, and how does it intend to tackle this handover of generations without losing out on the possible extra pie?

The more I thought about it, the more I had reason to believe that this press shop was actually de-pressing its profits by following this price discrimination exercise.

EXPECTATIONS PRIOR TO SERVICE ENCOUNTER:

The only expectation that I had prior to collecting the clothes was to get them in properly pressed condition, as long as the price was not unusually high to draw my notice. The clothes were pretty much neatly pressed as required, and in all probability I would not have noticed the price hike had it not been distinctly brought to my notice.

SERVICE CLASSIFICATION:

1) This is a tangible service in terms of the quality of ironing and the timeliness of delivery.

2) This is a case of possession processing. If required, anybody else from my family could have gone ahead and collected the delivery.

OUTCOME: I, the customer, returned home a happy man. However, the organization in the press shop may be losing out on sizeable profits in order to satisfy customer groups that they can do without.

PHYSICAL EVIDENCE QUALITY: The shop is set up just like any other ironing shop in the city. However, this is one area that they can improve upon by taking simple measures such as moving the prime pressing activity to the background in order to provide a better interface to consumers without incurring too much of an extra cost.

SERVICE RATING

a) Reliability: 3

b) Assurance: 4

c) Tangibles: 2

d) Empathy: 4

e) Responsiveness: 3