Smart Money Sense - Sample Content

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CHAPTER 6: DECEPTIVE MARKETING AND PACKAGING TECHNIQUES

PRODUCT PLACEMENT AND PRICING:

Stores and manufacturers package and position their merchandise to maximize sales results. Demographic research is employed to identify the consumer groups. Retail stores model their merchandising and stock placement to the education (college towns vs. industrial areas vs. agricultural areas), economics (income levels and real estate values) and, cultural diversity (Asian, Mexican, Russian, Anglo) of the consumers shopping in their stores.

Things to watch for in grocery stores:

Product Placement:

More expensive selections are placed at eye level.

Less expensive selections (brands) of the same item are placed above or below normal eye level requiring the consumer to reach or stoop to select a can or package.

Product Pricing and Selection:

Stores will be stocked with merchandise that is more frequently purchased by the area population. Grades and cuts of meats, produce, beverages, toiletries, and gourmet foods, vary frequently between stores in the same chain.

The pricing of basic foods also varies between stores, with higher prices, for the same goods, frequently found in areas with lower education and economic levels. Prices are usually higher in areas with less market competition.

DECEPTIVE PACKAGING

Read labels for content and amount:

When reading the contents of a can, bottle, box or, package, the item listed first makes up the largest content, followed in order of content amount, i.e. a bottle of apple juice may list the contents as: water, apple juice concentrate, and ascorbic acid .

A container of clothes softener when bottled specifically for and marketed in lower economic areas may be diluted and yet priced the same as a container of softener bottled to be sold in another more affluent, better educated consumer area.

Major grocery chains provide an individual price tag or sign on their shelves by each item. These tags list the name of the item as well as the price per unit contained in the item. What should the consumer do in this example?

A bottle of Brand X Apple Juice placed on a bottom shelf has a tag stating the bottle contains 64 fluid ounces at 4 cents an ounce and on the shelf above Brand X Apple Juice, at eye level and containing the same content proportion, is a bottle of Brand B Apple Juice which contains 64 fluid ounces at 6 cents an ounce.

Brand X Apple Juice: 64 oz. at 4¢ per oz.=$2.56

Brand B Apple Juice: 64 oz. at 6¢ per oz.=$3.84

$3.84 minus $2.56=$1.28

The SMART consumer would choose Brand X Apple Juice and save $1.28.

Forms of Deceptive Packaging

Selling Air – The box is much larger than the product inside, so it looks like you are getting more than you really are.

Sunny Side Up – Meat is packaged so that the lean side is on top and the fat side is on the bottom.

Down Sizing – Two cans are almost the same size, but one can contains 15 ounces while the other contains 13.5 ounces. This is true of packages also, one brand of sugar weighs 5 pounds while another weighs 4 pounds, yet they appear identical and are priced the same.

Misrepresentation – Package and can labels of lower-quality products are designed to be almost identical to the higher quality national product brand, yet they are the same price.

EVERYDAY MATH BAFFLES MANY!

A recent government survey found that:

Less than half of the adults in a nationwide survey could calculate the most economical size of packaged rice to buy at their local supermarket. The majority assumed the largest container of rice was the best buy.

Only 20% of adults could calculate a taxi fare tip correctly.

Only 16% of adults could balance a checkbook.

Test Yourself:

A recipe for punch calls for equal amounts of lemonade, limeade, orange juice, and ginger ale. How many pints of ginger ale would be needed in order to make 2 gallons of this punch?

Liquid Measures:

8 ounces (oz.) = 1 cup

2 cups = 1 pint

2 pints = 1 quart

4 quarts = 1 gallon

Dry Measures:

16 ounces = 1 pound

Answer: Four Pints

Practice:

When you go to the grocery store, drug store, or hardware store practice reading labels and comparing the different size boxes, cans and jars.

Compare apples to apples and Compare by unit price.

Two products with packages almost the same size, but not quite, must be compared by the price per unit. It is impossible to determine how many hundreds of dollars individual consumers waste each year because of their inability to use math skills to determine the best choices in everyday living.

Example:

A 10 ounce can of soup costs $1.50

An 18 ounce can of soup costs $2.50

Which has the lower cost per ounce?

Answer: $1.50 divided by 10 ounces = .15¢ per ounce

$2.50 divided by 18 ounces = .14¢ per ounce

But……......

The 10 ounce can instructs you to add a can of water to the concentrated soup contents. Now you have 20 ounces of soup. If a normal serving is 8 ounces, then one can will give you 2½ servings. (20÷8=2.5 servings)

The 18 ounce can of soup, says DO NOT ADD water. If a serving of soup is 8 ounces, then one can will give you 2¼ servings. (18÷8=2.25 servings)

Which is the better cost value?

The small, $1.50, can of soup yields 20 oz's.

$1.50 ÷ 20 ounces = 7½¢ an ounce

7.5¢ an ounce × 8 ounces = 60¢ a serving

The larger, $2.50, can of soup contains 18oz's.

$2.50 ÷ 18 ounces = 14¢ an ounce

14¢ an ounce × 8 ounces = $1.12 a serving

Answer: The smaller can of soup.

Which can has more servings?

Answer - the small can of soup.

GROCERY SHOPPING:

Always make a grocery list.

One day a week, usually on Wednesdays, the larger stores advertise their weekly specials in the newspaper. Comparison shop the cost of those items on your list between the various grocery ads, taking into consideration location and specials versus your overall list.
Based on what foods are on weekly specials you may choose to revise your original grocery list, change your menus, and save money by taking advantage of the weekly specials.

GROCERY LIST

REVISED GROCERY LIST