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To Increase Profits, Product Makers Just Add Water!

  We all know that product downsizing occurs when some amount of the product has been removed from the package inconspicuously, but the price remains the same.

A close relative to product downsizing is what we call “product dilution.” The product is formulated or reformulated in such a manner as to make it less expensive to manufacture.

Exhibit A:

A classic example is Tropicana’s “Trop50” drink that boasts 50% less sugar and calories. How did they accomplish this? It only has 42% juice and the rest is water and flavoring.

Exhibit B:

And if you have poked around the meat counter lately, some whole chickens and boneless chicken breasts have been plumped up with up to 15% of “broth” (aka water). [Note how “fifteen percent” is spelled out to make it less obvious at a glance.]

*MOUSE PRINT:

chicken broth

Exhibit C:

Procter & Gamble recently has been “diluting” some of their products to come out with a new “value” line. Witness the introduction of Charmin Basic and Bounty Basic, a cheaper single-ply product compared to regular two-ply rolls. And then there is the new Tide detergent in the yellow bottle. Priced less expensively than traditional Tide and presumably with a less effective formulation, it is designed to complete with other bargain detergents.

Exhibit D:

*MOUSE PRINT:

Dawn

And P&G’s newest product, Dawn “Simply Clean” is just beginning to hit store shelves. It caught regular Mouse Print* reader Tim B. unaware, who bought a bottle of the new stuff thinking it was regular Dawn Ultra.

“I didn’t notice the label until I went to use the soap. Very watery and very runny. As expected, it does not perform as well as the Ultra so I have to use more. My problem when I shop, is I expect things to remain the same. And these companies continue to get me. Gwaltney bacon, I purchased a pack of that only to discover I got 12 ounces instead of 16. Anitfreeze that was “pre-diluted” which means I bought a half gallon of water and half gallon of anti-freeze. Packaged meat with “water added”. And now “Non-Concentrated ” Dawn, AKA more water added. I thought the “Simply Clean” was just a new slogan.

Sad part is years ago, companies would improve their product to get you to buy it. Now it seems everything is going the other direction, to make cheaper products.”

Our intrepid consumer is a technician by trade, so he decided to test both old and new Dawn to try to determine how much the new non-concentrated Dawn had been watered down. The old one was thick and gloppy, while the new one was much thinner. In fact, he says the new product only has one-third the “solids” as the old one.

So how do you feel about “product dilution?” Sound off in the comments.

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For Once, The Small Print Giveth

  We have lamented for years that “the big print giveth, and the small print taketh away.” For once recently, the opposite was true.

To celebrate Cinco de Mayo, a college food delivery service issued this coupon offering students 10% off:

cindodemayo15

In a twist, however, it included some very unusual and unexpected fine print.

*MOUSE PRINT:

“So you’re one of those people who have [sic] to read all the rules and stipulations. You know what we think about that? We think that’s awesome. On the other hand, we think you should probably relax. … we think you deserve an even bigger discount for listening to us ramble. Try “TIMETORELAX” for 15% off any order today.”

So, as a reward for reading the fine print, this service was upping the discount to 15%.

How many people actually read the fine print and got the bigger discount? According to Business Insider, only 12%.

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Barclaycard Ring: A Transparent (?) Social Credit Card

barclaycard ring  From the lost archive of unpublished Mouse Print* stories…

To appeal to 20- and 30-somethings, Barclays Bank introduced a new credit card in 2012 called the Barclaycard Ring. They said it was “the first social credit card to be designed and built through the power of community crowdsourcing.” In other words, cardholders will have input into the features, benefits, and pricing of the card.

A bank official put it this way: “Through simple and transparent terms [emphasis added], we want to pull back the curtain that has traditionally separated banks from their customers and give our community a say in weighing economic tradeoffs that can create a better cardholder experience.”

Their website went on to say: “Being candid starts with using straightforward language without the confusing legalese. But we’re taking it a step further. For the first time ever, we’re going to give you a look at our profit and loss statement, [emphasis added] which shows you how we make money from Barclaycard Ring. And with Givebackâ„¢, you’ll even get to keep some of the profits for yourself.”

This credit card sounds like something created by hippies (oops, MrConsumer is dating himself) rather than a stodgy, money-grubbing bank, doesn’t it?

*MOUSE PRINT:

The terms and conditions statement for the card, which indeed has been simplified, explains how cardholders will (or won’t) be able to see the bank’s profit and loss statement:

This profit sharing feature is not based on the actual profits of the program. Instead, the Givebackâ„¢ program contains a transparent calculation that is used to determine what will be shared with the community members and which may or may not approximate actual profits. The Givebackâ„¢ program and the profit sharing features are offered at our sole discretion. We may discontinue the program at anytime.

Oh, so you really don’t get to look at the profit and loss statement, and the bank can decide on its own to stop the profit sharing plan. Nice.

2014 Update: Checking the bank’s first annual report, and the quarterly ones through March 2014, it appears the card has not returned any money under their profit sharing Giveback program. (They have given a small amount to charity, however.) It appears that they require their annual return to exceed 3% before they rebate money to cardholders.

*MOUSE PRINT:

The bank makes a big deal about offering a low 8% variable APR, as well they should. When you look at the fine print, however, how that rate is calculated gets a little murky.

The APRs on your account will be determined each billing cycle by adding a margin to the Prime Rate (which will be the highest rate published in the Money Rates column of The Wall Street Journal on the last business day of each month). See your Cardmember Agreement for more detail.

Excuse me, I thought this bank was supposed to believe in transparency. Exactly how much above the prime rate is the bank going to charge? It would be nice to disclose it in advance.

2014 Update: The bank now discloses on the homepage and in its terms and conditions that a margin of 4.75% will be added to the prime rate in order to come up with the actual finance charge that will be assessed.

Lastly, the bank maintains a message forum for cardholders where a recent topic of concern was whether the bank was going to raise its 8% rate. A product manager for the credit card addressed that issue in a blog post, saying in part:

The last thing we want to do is change the APR that the community likes so much. My legal team will never let me say never, but our intention is to never change the 8% variable APR.

Hello? (to both the product manager and cardholders.) This is a VARIABLE rate card, which by definition does not have a fixed rate, but one that changes monthly, according to the prime rate and the terms and conditions.

Barclays has come up with a very clever marketing scheme which will no doubt attract a certain type of user. For his part, MrConsumer will just stick with his 2% back card from Fidelity/Bank of America, and let them keep the rest of the profit, if any.

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