Marketing Guinea Pigs

[Something on a lighter note today, for the lead up to Canada Day celebrations on Thursday. I have a longer post on globalization in the works (inspired by the recently-completed G20 summit) which may appear by the weekend.]

Last year I wrote an article complaining about, of all things, the price of bagels. More particularly, a 20% reduction in the weight (or content) of a particular brand of bagels -- Country Harvest, made by Weston Bakeries -- while leaving the price unchanged. Their objective appeared to be increasing profits by betting on consumers not noticing the drop in consumable content. (Possibly they were motivated by the rise in the price of grains, which is obviously a key input to producing baked goods, but the topic today is regarding marketing the change, not their specific motivation or justification to change.)

Subsequent indications (I have no direct evidence) is that shoppers did notice the change in bagel content. In addition to bagels they tried the same tactic with their breads, and it backfired on them. The obviously anemic-looking "premium" bread loaves turned me off and, going by observations of others I observed who picked the loaves up, weighed them in their hands and then returned them to the shelf, turned others off as well. Very soon Weston gave up on the experiment and the bread returned to the original weight, where it has stayed to this day.

Not so with the bagels. Unlike the bread, the package of bagels was not so obviously reduced in content. Even so, it must have had some impact (it did on my shopping choices) since they have been experimenting with prices for many months. What they are up to I am not sure, except that it is both bewildering and entertaining at the same time. Although it was fun for a while, it's getting annoying. I'm beginning to feel like a marketing guinea pig, and I don't like being treated that way for very long.

The regular prize for a package of six Country Harvest bagels around here is typically $3.29 at Loblaws, where I often shop. The pricing experiments are nearly weekly events, and are in the form of 2-for-1 sales. For example, two packages for $5.00, which is $2.50 per package (you don't have to buy two). Since this an approximately 24% price reduction is more than the 20% reduction in content which started this pricing game, this could be seen as a good deal. These sales are not contained to Loblaws since there are equivalent sale prices at other chains at the same times.

I have this picture in my head of teams of accountants and product managers at Weston's head office studying the sales figures during and outside of sale periods, and trying to figure out whether to hold to original price or perhaps lower it permanently. The difficulty of selecting the optimum price point must be a daunting one to explain their nearly year-long experiment with pricing: $3.29...$2.50...$3.29...$250...ad nauseum.

Recently this numbing price cycle was interrupted to try out some other novel ideas. These ideas are to experiment with prices between $2.50 and $3.29. Pricing innovation must be taken seriously by Weston that they would have eventually deigned to try a few other price points to see what would happen. I have to wonder about these people that they would seem to model their customers as such simple automatons that they would persist in believing that there is no intelligence within them (us) other than to test a price against some vague internal scale and then having our brains throw a binary switch to the "buy" or "avoid" position. It's getting both annoying and tiresome. Now, rather than having to ask myself if their bagels are worth $2.50, $2.75, $3.00 or $3.29, I have to wonder if Weston's products are worth purchasing at all.

Weston needs to stop poking consumers with needles and make a decision. The never-ending price experiments need to end since they are showing themselves to be incompetent business operators. Does anyone at Weston have any knowledge of the consumer business at all? The supermarket chains are also complicit since they agree to post these silly prices without pushing back on the supplier. They at least should know better.