The Great American Supermarket Games - Packaging & Brand Tax

The Packaging Game

The packaging has a purpose that isn’t all bad.  Many preserve and protect the product, allowing us to make use of things that were produced far away or a while ago.  In this way they assure that an item arrives unspoiled and ‘help’ those of us who use the item to feel good about it.  The downside is that packaging is potently expressive, which ultimately costs us even more monies.

For manufacturers, packaging is the crucial final payoff to a marketing campaign.  How so?  Well it is not uncommon for us to have been ‘prepared’ for shopping and purchasing this product by lush, colorful print advertisements, 30-second television mini-dramas, radio jingles and coupon promotions.  Yet it is the package that makes the ‘final sales pitch’, seals the commitment and gets itself placed in our shopping cart.  Advertising therefore leads us into temptation and in many cases this temptation and its influence to us, is what makes the product possible.

Package colors, materials and other design elements are very deliberate. Much like advertising, packaging appeals to our emotions and directs our attention to specific product features, like health claims or a free toy, while distracting attention from other details, like small serving sizes or questionable ingredients.

But the package is also useful to us, in that it is a tool we can use for simplifying and speeding our decisions on what we buy (IF we read the package and not just look at the picture).  Packaging promises and usually delivers, in a predictable way.  With proper Nutritional Labeling they can give us the vital information we need to purchase nourishing and healthy food items or avoid ingredients that we object or are allergic to.

The Shrinking Package Game
  
Package downsizing is another marketing ‘game’ to get more money for less product.  Just about every manufacturer today utilizes this particular strategy.
  
No we do not need glasses, this is really happening!

Ever hear about the “brand tax”? 

This is an ‘unofficial’ sudo-tax based on when a company develops a product that becomes very well-known and very popular, that product's brand becomes a highly valuable commodity.  This causes an increase in price due to the popularity of the band and is known as the ‘brand tax’.

Companies often spend thousands and thousands of dollars on developing brand recognition, investing in symbols, slogans, catchy jingles and high-impact advertising campaigns that will stick in a consumer's mind. Over time, the product becomes more and more familiar to consumers and studies have shown that people are often more comfortable buying products that are familiar to them rather than unfamiliar alternatives – no matter that the price is higher. 

Of course, companies cannot justify a brand tax if their products aren't high-quality. Once this quality and popularity is established the unofficial market price or "brand tax" is added to the wholesale cost.

Many store brands are made by the same companies who sell much more expensive brand-name products. Most supermarkets do not have their own manufacturing plants as it is cheaper for them just to have their products packaged by established manufacturers.

Some budget-conscious consumers buy lower-priced generic products whenever possible, as a matter of principle. Other consumers compare prices and only buy generics sometimes.

Some generic products are nearly identical to their brand-name equivalents. Other generics are even manufactured in the same factories or processing plants as the better-known brands. In other cases however, the difference in quality is considerable.

In the long run, brand popularity depends not only on how effectively a product is marketed, but on quality and consistency as well.

Each consumer has his or her own unique tastes and preferences, and each consumer has his or her own budget to consider when shopping. Accordingly, despite all the advertising in the world, only you can decide whether or not you should pay a higher price for a brand-name product.

 The trick here is to always calculate the unit price or price per ounce and never trust the package size.

 

The next post will be on the Misleading Labeling Game and the Dissonance Mind Game

Until then Be Prepared - Not Scared ;-}

TNT