The Biz of Pacelinebiz

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Deceptive Pricing

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Don't Be Fooled

Don’t Be Fooled

In times of inflation or when input costs have spiked, companies will sometimes resort to reducing packaging size or sell their product in new units of measure to hide a price increase.    This happened recently to me when I was at the grocery store and noticed that a lunch time favorite – Baked Doritos went from 11.5 ounces for $3.99 to 8 ounces for $3.29 an 18% increase.  A 3 pound can a coffee went from 48 ounces to under 30 ounces which is obviously no longer a 3 pound can of coffee.  This began many years ago perhaps the late 1970’s or early 1980’s.  It has continued ever so slightly through the years to the point that now a 3 pound can of coffee can come in as little as 24.5 ounces.  Do you realize that a 3 pound can of coffee has shrunk by almost half?  If you look closely, the can size is only about 20% smaller.   I have seen Coke sell a case of its soft drink cans in a new 20 can quantity.    The catch is the price is about the same.  That is a 20% hidden increase in price.

Today’s blog is not about ripping companies that do what was described above but to take the discussion down to the level of the small business owner.  You need to ask yourself; how do you want to roll out a price increase?  I hope most business owners reading this would not resort to deceptive practices.  In my opinion, the way to do it is to take advantage of the relationship you or someone in your company has with your customer.  The companies mentioned above do not have a personal relationship with their customers just what they have built up through TV commercials and other marketing efforts.

A small business owner needs to avoid competing on price.  You need to make your customer aware that you have appropriately priced what you provide them – the level of service and or quality they receive is a good VALUE.  You can’t get Mercedes quality for a Yugo price.

Have a great week providing Mercedes quality at a Mercedes price.

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Written by pacelinebiz

November 11, 2013 at 8:01 am

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