Kellogg's is planning to raise prices and decrease package sizes for its ready-to-eat boxed cereals this fall. The cereal giant is expected to increase its marketing budget, or at least maintain it, to make sure that customers keep buying their products in spite of pricing changes. After all, they have to convince the consumer that it is worth paying more money for less cereal for their profits to remain the same.
But is it worth it? The two main reasons that people eat cold cereal are convenience and price. A bowl of cereal takes seconds to prepare and you can get several meals out of one box. But, if given all the time and luxury of a relaxing Sunday, cereal might not be the first thing that breakfasters would reach for. A small price hike, about 2%, might not make a big difference in buying habits, but it will certainly set the stage for other cereal companies to follow in the footsteps of the largest cereal company and could even lead to further changes in pricing. When consumers realize that they are getting less than what they think they're paying for, some might stop buying cereal on a regular basis and the companies could be hurt more in the long run.
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Reader Comments (Page 1 of 1)
8-07-2006 @ 7:22AM
Alex said...
One way to get around this is to make your own. Mum used to make her own muesli and I make my own cereal now. By making it yourself you can add only the things that you like (no dried banana please!) and you can also control other things like sugar and fat content, and even the sourcing of your food.
I go to the shop and buy a big load of (organic) bran flakes, dried fruits, nuts and then it takes me about 15 minutes to assemble everything at home. Hopefully I even manage to cut down on packaging along the way.
Problem is, of course, now commercial cereal tastes far too sweet, so I'm kind of stuck making my own!
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8-07-2006 @ 9:36AM
Jessica said...
cereal is already ridiculously expensive. $4.50 for a box of cheerios?!
but of course i pay it, because i neeeeeeeeed it.
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8-07-2006 @ 10:03AM
Wealthy Industrailite said...
Screw the cereal mafia. I've never bought a box at full price, just when they are on sale.
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8-07-2006 @ 10:38AM
calamari said...
Consumer Reports has tracked cereal companies doing this for years -- smaller boxes at the same price, then the "new improved" box goes to a higher price.
Lots of other product categories do it, too.
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8-07-2006 @ 11:25AM
Monkey Eeat Food said...
I don't eat cereal, but my husband buys a box every other week. I can't remember the last time it was a name-brand cereal. $3 for sugar coated flakes of corn versus $4.50-5 for Frosted Flakes? No contest.
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8-07-2006 @ 11:31AM
JoAnna said...
it's the closest thing to human kibble you're gonna get, (since the monkey chow thing failed, LOL) so some people are still going to look at that box of cereal and say, "hey, $5 for six meals?" and still think they're getting a bargain.
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8-08-2006 @ 4:06AM
Annie said...
Charge more so you can pay the guys in the suits to think of ways to sell more cereal. Yeah, that makes sense. *rolling eyes* Thank god for Trader Joe's or we'd never have cereal in the house.
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8-09-2006 @ 12:24PM
KB said...
For Cheerios fans, Trader Joe's has Joe Os for 1.99 for a huge box. I like them better, as they're criper longer in milk.
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