The reality is that the prices we pay for everyday items are rising faster than our salaries. Inflation is a significant problem for families and businesses across America.
The purchasing power of our dollar is shrinking, and it’s becoming harder and harder to make ends meet.
Even more frustrating is that companies are finding ways to disguise inflation by changing their products. Here are 10 examples:
Companies Have a Few Options When it Comes to Hiding Inflation:
1. Cut Costs
Companies can reduce their expenses, which will make their products cheaper. Also, their product marketing strategy is different. Some companies that sell digital products and services use this tactic.
For example, if you’re paying for your Netflix subscription and you suddenly need more storage space, you might be able to add another movie or two to your queue without having to pay more.
2. Raise Prices
Companies can raise their product pricing strategies if they want to keep up with inflation. This might be the easiest way for them to do so — after all, everyone likes to get more for their money.
A product positioning strategy is an effective way to increase sales and maintain market share.
However, this option can be risky for companies, as some consumers will become upset if they feel like they got cheated out of something that should cost less than it does now.
3. Reduce Quality
Companies can also reduce the quality or longevity of their imported products in an effort to save money.
For example, instead of investing in new tires for your car or a new washing machine every few years, you might just opt for buying cheaper versions of these things that will likely split down sooner rather than later.
4. Changing The Shape of Products
A product branding strategy can also be used to disguise inflation.
Companies can change the shape of their imported products online to make them look cheaper.
For example, if your favorite brand of cereal has been making smaller serving sizes lately, it could be because the company wants to cut costs.
If you’re looking at a bag of chips from your local grocery store, notice how many pieces there are compared to what was available when you first started eating them regularly? You’ll probably find that there are fewer chips inside each bag now, but you probably won’t realize why unless you compare them side-by-side.
5. Adding Fees to Customers
This is the pricing strategy of a new product. Some companies charge extra fees on top of the regular price of their products in an attempt to hide inflation.
This is especially common with cable TV providers. It is those who often tout their low monthly rates while charging exorbitant amounts for various additional services such as HBO. If you’re already paying for a service like cable and you suddenly start seeing higher bills, ask yourself whether those added charges were necessary.
6. Offering Fewer Options
Another way companies are dealing with inflation is by offering fewer options. This is one of their product growth strategies for them.
Instead of giving you dozens of different channels to choose from, they may offer only one or two. It would be too expensive to provide multiple ones (or even worse, some random channel) for the same price.
Companies might also lower the number of channels on their packages over time in hopes of getting people to stop watching television altogether.
7. Change the Packaging
This method of saving money involves changing the packaging of a product without reducing its content. The reason behind this is obvious. It’s much easier to pass off old packaging as newer packaging than to try to convince someone that your product is better or cheaper than it used to be.
Of course, none of these methods are foolproof. Inflation isn’t always bad for businesses; however, it is good for consumers. So remember that if you see your bills increasing despite your best efforts to control your spending habits, you don’t necessarily get scammed. Just take a deep breath and rest assured that you weren’t the victim of inflation.
However, a product placement strategy aims to get products placed in front of consumers or in their line of sight so that they are more likely to purchase them.
8. Do It Yourself
To suggest that businesses create goods and people buy them is oversimplifying things. The efforts of both manufacturers and consumers go into making many of the goods we use.
As inflation grows, buyers may seek cheaper alternatives to manufacturers’ supply. Flat-pack furniture reduces production costs and allows buyers to assemble their own furniture.
Banking, which has moved online store, is now more essential to national economies than in the 1970s, and “co-production” reflects this transition. Self-service, whether voluntary or involuntary, may also reduce inflation’s effect.
Permanent Change?
Long-term changes in consumer behavior are likely the result of multiple factors. Climate change, the aftermath of the epidemic, and Brexit will affect inflation this time.
The question of whether the popular culture will emphasize materialism less is fascinating. Minimalist consumer subcultures have always existed, but more people are reevaluating their beliefs and goals.
Rising prices, climate change (and climate guilt), and lockdown knowledge may help this transition.
Final Words:
This article is here to show the common ways a company will try to hide the actual price of a product or service. They come in many forms, some are obvious, some are more subtle.
Overall, companies try to maintain the real dollar value of their product lines by altering one of these three cost components within the product line. They may be more likely to alter the selling price and less likely to adjust the larger cost components (i.e., labor or overhead costs).
Next time you go international shopping and realize your prices have gone up, you can check out the list below to see if the item has actually increased its price. If it has, you can call them out on this practice accordingly.
