Marketing from the Grocery Aisles: Packaging Reinforces Pricing

I rarely go down the cereal aisle because I make my own granola, which is significantly less expensive, than commercial cereals. On Saturday, however, I found myself slowing pushing a cart through cereal alley, pausing to look at the variety and the way they’re marketed.

I immediately noticed the differences in packaging. Bold lettering, bright colors, ginormous bowls of flakes, which if close to life-size could substitute for chips, dipped in bowls of milk, with a peek-a-boo berries or sliced fruit. clip_image004

Some boxes relied on characters — Tony, Count Chocula, Franken Berry, Lucky, Trix, Toucan Sam, Cap’n Crunch, Quisp, Fruity Pebbles, CinnaMon, BuzzBee, and the trio of Snap, Crackle, and Pop – most likely to catch the attention of youngsters, ambling behind their parents or mid-shelf, secured in shopping carts.

What was most noticeable was the simple design of generic or store-brand cereals. They’re scarcely more than a colored box with a giant bowl, showing what’s inside, and simple text to describe the product.

  Startling is the price difference between brand name and store or generic cereals. A 12.2 ounce box of Kellogg’s Fruit Loops sells for $3.99 or $5.23 per pound. A comparable size box of Kroger Fruit Rings is $2.27 or $2.97 per pound, a whopping $2.26 more per pound!

Malt-O-Meal’s Tootie Fruities, which comes in a 33 ounce bag is $2.41 per pound, a 56-cent savings over the store brand.

Kellogg’s Special K Fruit & Yogurt and the Kroger brand, Toasted Flakes with Fruit & Yogurt, is similarly priced, costing $1.18 more for Special K.

clip_image002Granted brand name cereals might taste better or contain more goodies, but I can’t help believing there’s a limited number of cereal factories. During the day, they crank out name brand cereals. Come the swing shift, they flip a switch, tweak a few ingredients, and churn out store and generic brand cereals throughout the evening.

Malt-O-meal claims their cereals taste the same as name brand versions. And most likely, they’re darn close in taste. What’s interesting, however, is that Malt-O-Meal and store brands reinforce the perception their products cheaper, and possibly lower quality by packaging them in Plain Jane boxes, and cellophane bags that tout “50% more” than the name brand 15 oz. box.

Think about that concept.

Would you purposely make a car look cheaper? What about clothing? Household goods? Appliances? The answer is probably “no.” Malt-o-meal

I recognize that manufacturers and retailers of economy goods typically compete on price, but it seems outlandish to strengthen what could be perceived as a negative – lower quality ingredients or components – by skimping on packaging. 

Consider Target. They’re a step (or in my opinion, several steps) above Walmart and Kmart, but certainly not in the same league as Macy’s, Dillards, Nordstrom, Bloomingdales, and Le Bon Marche. However, their store brands – Go International, Archer Farms, etc. – are hip with cool packaging. They have alliances with top designers, who create lines of clothing and goods, which are exclusive to Target. 

No doubt store and generic brands are successful. Grocery stores and retailers wouldn’t continue offering them if they weren’t. I just wonder, however, what would happen if they put a little more effort into great packaging and design. Would it result in an uplift in sales?

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