Tuesday, March 29, 2011

Fool Me Once, Shame on You....

"Consumers are generally more sensitive to changes in prices than to changes in quantity," says a marketing professor at Harvard Business School in an article in today's New York Times by Stephanie Clifford and Catherine Rampell.

That explains why your one-pound box of spaghetti is easier to lift. You haven't gotten stronger; it's gotten lighter.

That marketing professor may be right -- at least the first time. Especially when, as he says, "companies try to do it in such a way that you don't notice, maybe keeping the height and width the same, but changing the depth so the silhouette of the package on the shelf looks the same."

Can we call that by its real name? No, not "smart packaging design."

It's called cheating.

And it assumes that we're all stupid.

One of my all-time favorite quotes about marketing is from the legendary advertising man David Ogilvy: "The consumer is not an idiot. The consumer is your wife."

So why are all these companies treating us like idiots? Do they think we're too stupid to understand that if commodities prices are soaring, it will force them either to reduce profits or to raise prices? And that reducing profits will have an immediate negative effect on their share prices (and that upholding shareholder value is their responsibility)?

Or might it be that, where raw ingredients' prices aren't increasing dramatically, it's an easy way to make a little extra money?

The Times article quotes one careful Texas shopper who notes that she used to buy 16-ounce cans of corn. Gradually, the cans' weight slipped to 15.5 ounces, and then to 14.5 ounces, and now: "The first time I've ever seen an 11-ounce can of corn at the store was about three weeks ago, and I was just floored," she said.

And how does she feel about this "responsible" attempt by a company not to raise its prices? "It's sneaky, because they figure people won't know."

She's nicer than I would be. I'd call it stealing. How is it different from putting your thumb on the scale?

If you have to raise prices, do so. Explain why to me. Be transparent.

You might even use some of that big advertising budget to talk to me as though I had a brain, instead of trying to manipulate me with winsome children and earworm jingles.

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