Raising prices to lower them

[sarongsong]

Ah, creative capitalism:June 6, 2007
General Mills Inc., the maker of Cheerios and Trix cereal, plans to raise prices later this month [June 25] by as much as 4 percent to counter higher grain and energy costs...is reducing the size of some cereal boxes, allowing for lower prices more in line with what competitors charge... The Detroit News (http://www.detnews.com/apps/pbcs.dll/article?AID=/20070606/BIZ/706060367/1001)

[LurchGS]

I don't buy boxed cereal - it's far too expensive. The bagged cereal is exactly the same, and about half the price.

But the program mentioned in the OP makes perfect sense - they did the same thing with candy bars

[Gillianren]

I just don't eat cereal.

[mr obvious]

This appears to be the common strategy. Chocolate packages containing 8 bars instead of 10 for the same price. Ice cream in 1.75 quarts instead of half-gallons for the same price. A while back, I heard cough medicines were being diluted by a factor of 2, with added flavoring, but the price remained the same.

It might be easier simply to redefine the weights and volumes to be smaller, as a measure against inflation, in contrast to all this fractional work.

[sarongsong]

...they did the same thing with candy barsRight, but I don't recall any pre-announcements of same, just their gradual supplantation of the "old" sizes. What grabbed my attention to this practice recently was the label on what I'd considered to be a half-gallon of ice cream. A closer look reveals "1.75 Quarts" for some brands, while others do offer the "Half Gallon (1.89 L)" size. http://bautforum.com/images/icons/icon8.gif

[Chuck]

Boycott! Boycott! I don't buy cereal either, so I recommend a boycott!

I worked at a bowling alley during the big candy bar shrinking in the seventies. Customers grumbled at me about it. I explained that that's what they were sending us now, but they still acted as if it were somehow my fault. I also told a few people that I wouldn't blame them if they stopped buying candy but they continued to buy. Sellers can live with complaints as along as people continue to buy.

[Maksutov]

WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTHThe preceding messages were brought to you by the friendly people at Minipax, Miniplenty, Minitrue, and Miniluv.

Where in Room 101 would you like to go today?

[Noclevername]

Bah. I'm still hung up on the whole ten-hotdogs-eight-buns fiasco.

[publius]

From the title, I thought this was about an old retail trick of marking something way up just to be able to claim a large mark down percentage. You'll notice some of those "SALE! All items 50% off". Well, in some cases, they just about double the original price (on paper), then knock off half of that, allowing them to honestly say 50% off.

A great-uncle of mine (who lived to be 101 and retired in 1963, 4 years before I was born) did a trick like that, but for a very different reason.

He was the shop foreman at a Cadillac dealership for years until he retired. He used to joke about this one preacher who would bring his Cadillac in for service and repairs, and then demand a 10% "ministerial discount".

IIRC, he raised the normal prices by 20%, then took 10% off of that, and so that preacher actually paid more than everyone else, 8% higher if that 20% was correct. That uncle of mine did not like preachers......well, the main thing was preachers angling for handouts, which happens a lot to this day. Note he didn't just cancel it out, he actually raised it. :)

-Richard

[Gillianren]

Bah. I'm still hung up on the whole ten-hotdogs-eight-buns fiasco.

I've always wondered why so many people get so passionate about that. You can get packages of hot dog buns with twelve in the pack, too; just buy one with eight and one with twelve and two packages of hot dogs.

[Maksutov]

You could always just buy one of these: one dog, one bun! (http://mki.wisc.edu/HGIA/graphics/11B-Wienermobile_2004.jpg)

[NEOWatcher]

Ah, creative capitalism:
Yep; nothing new. Last year (IIRC) a yogurt maker did the same thing, and hyped it up by saying they are lowering the serving amount because they are concerned about the diet of America. When asked about price they had no comment.

It might be easier simply to redefine the weights and volumes to be smaller, as a measure against inflation, in contrast to all this fractional work.
Then we'll have all sorts of claims based on different inflation measurements.
It's bigger than the 1995 pound when you adjust for deflation. :lol:

[Christopher Ferro]

From the title, I thought this was about an old retail trick of marking something way up just to be able to claim a large mark down percentage. You'll notice some of those "SALE! All items 50% off". Well, in some cases, they just about double the original price (on paper), then knock off half of that, allowing them to honestly say 50% off.


Jewelry stores do that all the time. It's amazing, too, when you realize the enourmous mark-up they have. 1000% in some cases.

CJSF

[Moose]

My (former) car insurance company did that. Prior to a provincial election, they raised their rates 20% across the board. Then two months later, when the election was resolved, they issued a 20% retroactive refund, across the board, then trumpeted that the government "convinced" them to "lower" prices 20%.

Only the politicians were fooled by this, but it meant four more years of getting gouged.

[NEOWatcher]

Jewelry stores do that all the time. It's amazing, too, when you realize the enourmous mark-up they have. 1000% in some cases.
A lot of non-consumer industries do that. I once worked for a construction related company and we did the same thing.

The reasoning is that a price book can be printed and last for a long time. All of our quotes were based on Standard Discount which at the time was 60% (I think).

Also; every time I do a remodeling job around the house, my cabinets are always 50% off. Just sometimes they have an extra 10% off.

[Spock Jenkins]

Another law they have is that an item can only be on sale so many weeks out of the year before it can no longer be advertised as a sale price. So what do the stores do? They create multiple product numbers for the same item, that way it's not the same item going on sale.

[NEOWatcher]

Another law they have is that an item can only be on sale so many weeks out of the year before it can no longer be advertised as a sale price.
But they can advertise a discount, without advertising it as a sale, and they get around that issue.

[Fazor]

It's the same as the thread on chocolate, about replacing cocoa butter with a cheaper alternative, without lowering the price of the finished product (presumidly).

Sell less for more, and profits soar! (That rhymes, therefore it's true).

[Christopher Ferro]

Sell less for more, and profits soar! (That rhymes, therefore it's true).

I am filthy rich and a son of a .....

No, wait that won't work.

CJSF

[Trebuchet]

It's not just physical products either. The cable company (my least favorite monopoly) has been deducting about one channel every month or two from the "enhanced basic" service without changing the price. They also used to carry a lot of FM radio stations but those went away several years ago. They probably get around the regulatory aspects of this by not having advertised these channels as part of the service.

Our local phone company just installed fiber in the neighborhood and we'll soon be able to get our TV from them. I don't like them either but might switch just because I hate the cable guys.

[Roy Batty]

I eat cereal. I'm a 'cereal killer' (c)Neil Gaiman, Sandman :)

[Christopher Ferro]

I thought 'cereal killer' was from some 80s group called "Green Jell-o." They had to change their name to Green Jelly because the makers of Jell-o got litigious. My brother used to have a VHS tape called "Toucan Son of Sam" where the lead "singer" was dressed as ... well, never mind. It's complicated and disturbing, all while entertaining.

CJSF

[Ronald Brak]

Sell less for more, and profits soar! (That rhymes, therefore it's true).

But if honest competitors thrive, you won't survive!

(Lucky our competitors are crooks too.)

[danscope]

It's not just physical products either. The cable company (my least favorite monopoly) has been deducting about one channel every month or two from the "enhanced basic" service without changing the price. They also used to carry a lot of FM radio stations but those went away several years ago. They probably get around the regulatory aspects of this by not having advertised these channels as part of the service.

Our local phone company just installed fiber in the neighborhood and we'll soon be able to get our TV from them. I don't like them either but might switch just because I hate the cable guys.

Yes, PLEASE bring on fibre optic. Exponentialy more speed, and unlimited channels, super HD video etc etc. Cable and the gremlins who operate them will be dinosaurs. We don't need no steeenkin cable!
I wait for the day we can load our trebuchet with a cable box and fling it
just for amusement.
:) Dan

[Mister Earl]

They'll put on the squeeze with fiber before long as well. As soon as they got a good hold on the market, they'll gradually scale back product quality and services with the excuse of "keeping costs down", which slowly increasing the price due to "increasing costs", "Inflation", or to raise "expansion capital". Before long you'll be paying too much for a sub-par service. That's the capitalistic trend.

[Fazor]

Anything that comes out and is "Healthier" than similar products is automatically more expensive. Tostitos came out with whole-grain nachos that my GF and I both love. Great taste, (slightly) healthier. Of course, they're about 80 cents a bag more, but the bags are (guesstimate) 10-20% smaller. Go figure.

[Noclevername]

Before long you'll be paying too much for a sub-par service. That's the capitalistic trend.

Before long? As opposed to what we're doing now? (Gas prices come to mind.)