Should your Glass cost more than your Bottle?

Apologies that this is coming a little late, but I think about this each time I look at my beautiful glass.  After Friday's class, I stayed after to have a brief chat with Tempe about a topic I am very passionate about (and has come up a few times in class) - Pricing.  I can't stop thinking about this glass and their U.S. launch strategy.

Before you read what I write below, I would love it if you could write your answer to this question and then post it in the comments after you're done reading- TRY NOT TO CHEAT! :)

That nice stem you have, given what you heard in class and your experience tasting wine with it since, how much do you think they sell it for to a consumer?  To a restaurant that is ordering in bulk?  Can't wait to hear your thoughts.






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Hope we didn't spoil it.. Now the answer:

She sells it the machine-made ones we have for $29 to a consumer and at a discount beyond that to restaurants who buy in bulk.  (The mouth-blown, higher end option was around $75 or $80).

I couldn't believe it.  I told her that was way too low.  I looked online and in some stores, and I found varietal-specific wine glass ranging all the way from the $2 - $4 per glass range to $80 per glass.

Here's why I think this should be at least $50 per glass, based on three common pricing principles.

• The Innovation argument: It is a completely new concept. You have one opportunity to train the consumer. Consumers and business owners alike would have no idea what this new shape means for the wine-drinking experience.  While the crystal is also a point of differentiation, the shape is the main driver.  In pricing this way, you are implying the consumer that the way the shape is optimized for wine consumption is not worth anything.  You leave little room for growth.  True, the Tiffany's glass may have the brand or a beautiful design or a better quality of crystal- but is it worth 2x?  No one knows... until you tell them.  And it's much easier to bring a price down than take it up again.
  
• The Cost Reduction argument (EVA): Tempe told us part of her sell to restaurants was that these glasses are much more durable (so they break less) and universal (so you don't have to train the staff on which type goes with which varietal).  I don't have the data on what this saves the restaurant over time, but once again, it implies that this should cost more than the varietal-specific glasses they are buying today.
  
• The Value-Based argument: One other option, which is my personal favorite, would be, rather than to pin the pricing rationale on benchmarks of pricing of existing glasses, to pin it on the increase in value it creates for the wine itself.  Under this argument, I would say: if I am a wine lover, and I am paying for extremely nice wine for home consumption, and I realized (through a tasting at a wine store or what have you) that all this time, my vessel was hindering my entire experience of the wine, it would not be a stretch to start thinking of the price of the glass itself relative to what I pay for a nice bottle of wine.  Without this glass, I am losing money in only capturing part of the wine's experience.  This is even more important when you consider that their target customer at the moment is not the $4/bottle unsophisticated wine drinker.  They are targeting people who care and restaurants who want to incorporate this into their brand.  

The entire conversation reminded me of Fever Tree, a premium tonic water, which recently launched into the U.S. You can see one of their ads below:  "If 3/4 of your Gin & Tonic is the Tonic, make sure you use the best."  If you are paying $100 for a bottle of wine, make sure your glass is equally premium.

And how much does Fever Tree charge for a 4-pack of their plain 6.8 fl-oz bottles of tonic?  You can buy it for just a few dollars more than the glass we are using in class.  What a good deal. ;-)