Natural partners bring unexpected bonuses

Rory Sutherland

Rory Sutherland pushes the principle of complementarity to its logical conclusion: category not just brand promotion

UNTIL 1993, when I first travelled to the US, I was one of the least valuable consumers of cola in Britain. This was not because of price or availability (I grew up in a self-employed family where wholesale crates of Coke littered the house). No, my Damascene moment happened when I found the US does not share the European belief that ice is a luxury good, to be supplied sparingly if at all.

Staying in American hotels, we found there was usually an ice machine in the corridor outside the room. I soon made the fascinating discovery that, with abundant ice, a drink that was slightly insipid lukewarm became delicious when properly served.

Ice and Coke would be described by economists as ‘complementary goods’ - or goods with a ‘negative cross-elasticity of demand', meaning a fall in price of one good will increase demand for the other. The example usually given by economists would be hotdogs and hotdog rolls, but you can extend the concept further if you wish - to computer hardware and software, to popcorn and cinema tickets or even film rental and pizza delivery. One of the cleverest ways of using the idea of complementarity was the suggestion - never implemented, as far as I know - that pizza delivery businesses should be equipped with hardware to burn DVDs on demand, so that you could order American Beauty along with your American Hot.