Is Your Coffee Too Cheap? Using Brain Waves to Test Prices

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According to the study results, the subjects would be willing to pay between €2.10 and €2.40 for a cup of coffee, which is significantly more than Starbucks actually charges. "In other words, the company is missing out on millions in profits, because it is not fully exploiting consumers' willingness to pay money," Müller concludes.

Together with scientists from the Munich University of Applied Sciences, Müller took the experiment a step further. The team of researchers had a vending machine installed in front of the university dining hall, where students could buy coffee for 70 cents and cappuccino for 80 cents. There was no fixed price for a latte macchiato. Instead, students were given the chance to decide for themselves how much to pay for the beverage.

Several weeks and hundreds of hot beverages later, the average price for the popular Italian drink among the Munich students had leveled off at 95 cents. Then Müller went into the laboratory with a smaller subject population. Once again, the subjects were shown prices and their brain waves were measured. The astonishing result was that, on average, the brain signaled its consent at an average price of 95 cents -- apparent proof that the ideal price for a product can be determined without any polling whatsoever.

"A study like this has never been done before, even though scientists have been studying brain waves for decades," says Müller. However, some consumers are likely to be horrified by what supporters of so-called neuro pricing are already calling a revolution in marketing: the determination of a feel-good price on the basis of brain testing in the laboratory.

From the perspective of the neuroscientist, however, the fear of the transparent customer is unfounded. "Everyone wins with this method," says Müller. He cites as evidence the tremendously large number of flops in the consumer economy. About 80 percent of all new products disappear from shelves after a short time, never to be seen again.

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