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Old 09-10-2020, 04:47 PM
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Default Re: Why must some companies make price increases that are sneaky--not straightforward

Originally Posted by loboloco View Post
Market research. It shows that people in general prefer to pay the same for a little rather than more for the same. Keep your size, charge more, people will eventually quit buying.
What market research shows is that people do not read the volume on the box. If you keep the same graphics and only change the quantity, most customers do not know it was changed until the box of pasta doesn't quite feed everybody like it used to.

Despite the deception, now known by the consumer, most retain their brand preferences.

I know because I did it for years in the pasta business and later in coffee and cereals. I no longer produce such items but...; Today I have a business that services that same group. Marketing people are still my main customers.

Originally Posted by pjohns View Post
One practice that I simply despise is downsizing.

I do understand that inflation is a reality; and that companies must, therefore, periodically pass along those higher costs--including wholesale costs of the product itself; labor costs; rent on the building (if it is not owned outright); and any other costs associated with the production of goods.

But a straightforward price increase is certainly an honorable way to achieve that.

Downsizing, on the other hand--in the apparent hope that many people will just not notice the slightly smaller package--is not really honorable.

For instance, the 23.6-ounce container of body wash that I regularly purchase is now just 22.0 ounces. (The container it comes in is of an irregular shape--so I really cannot describe it by the typical geometric terms--but the new bottle is designed just like the old bottle.)

If the company had simply increased its wholesale price by less than seven percent, so that its retail outlets might increase their own price from an even $3.00 to $3.26, it could have achieved the same end--but without any deception.

I suppose that I just do not like deception in marketing.

Correction: I know that I do not like deception in marketing

BTW, just increasing the price to the retailer by 7 % will not raise the retail price 7%. Likely more. retailers make more margin for the same real estate so the objection to higher prices will not be made by the retailer. They will pass the blame for the now 10% increase through to the wholesaler and manufacturer. Customers will still shop the same stores and buy the same brands to which they have become accustomed. Call it deceit or cheating, whatever you want. But the instability of retail prices is more the result of inflationary pressures which are more extreme now that the dollar is no longer based on the gold standard and therefore easily printed.

Our government just invented two Trillion dollars out of thin air. What price pressures will that put on marketing and eventual prices at retail? Yeah, blame the producers right?
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Last edited by FrancSevin; 09-10-2020 at 05:00 PM..
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