Price Increase Tricks Ain’t Chopped Liver 2 Consumers

WSJ details “How Companies Raise Prices Without Raising Prices,” though well-worn favorite tricks include jacking up price of a given product then pretending a 2-fer deal is better than ever; the incredible shrinking box or bottle is another.

But, let’s not scoop the newspaper, which is doing the public a favor by warning “Companies hope that by making price increases hard to see, they can escape notice & avoid a customer backlash.” The trick for the marketing strategists, it’s noted, is to “increase prices … covertly … without losing sales.” Besides the above noted “adjustments”, WSJ calls out the common “unbundling of services, lowering product quality & devaluing reward programs.” Airlines are good at this. Then, there’s the “disappearing deals & coupons”, although I have never been a sucker for those “10 Cents Off” coupons for a box of rice. Another trick I’ve never fallen prey to is the “sunk costs of memberships” in those warehouse clubs that play with the cost of things like a “64-ounce container of mayonnaise … that costs $7.99, or a 48-ounce bottle of the same brand at a supermarket for $5.94.” Fool me once …

During the pandemic, perhaps the most cynical tactic is what the WSJ calls the “From good to better & from better to best.” For instance, “Peleton lowered the price of its most popular basic spin bike by $350, or 16%, from $2,245 to $1,895. At the same time, it introduced a more expensive & profitable new bike for $2,495.” Maybe the car manufacturers are the elites of this category as nearly every year they “introduce” a “new & improve” model car at a steep price increase that the year before was introduced as “new & improved.” What? The 2020 model was chopped liver?

Davd Soul