Saturday, September 27, 2008

Let's Be (dis)Honest: How Short-Sizing Can Impact Your Brand

De*cep"tion\, n. [F. d['e]ception, L. deceptio, fr. decipere, deceptum. See
1. The act of deceiving or misleading. --South.
2. The state of being deceived or misled.
3. That which deceives or is intended to deceive; false representation; artifice; cheat; fraud.

Usage: Deception usually refers to the act, and deceit to the habit of the mind;
hence we speak of a person as skilled in deception and addicted to deceit. The practice of deceit springs altogether from design, and that of the worst kind; but a deception does not always imply aim and intention. It may be undesigned or accidental. An imposition is an act of deception practiced upon some one to his annoyance or injury; a fraud implies the use of stratagem, with a view to some unlawful gain or advantage.
Webster's Revised Unabridged Dictionary. MICRA, Inc. 30 Sep. 2008.>.

Today I decided to talk about something that has been all over the media lately. Consumer deception. In regards to marketing, deceiving the customer is not generally viewed as a healthy practice, or something that gives you any sort of competitive advantage in the marketplace. So why is it many major companies use deception on a regular basis (whether or not they acknowledge they are doing it)? And why would these companies resort to such measures that could have a negative impact on their brand's reputation?

The answer is (surprise, surprise) M O N E Y. Most companies have regular, focused efforts towards cost cutting to help improve their bottom line and keep them competitive in the market place. Although this is a common exercise, in times of economic hardship and rising raw material costs, an organization may struggle to find creative ways to reduce costs without impacting their customers. Since the bottom line becomes the primary focus for survival, when all of the "good" ideas are used up, a company is forced to move on to the “tough choices.” I worked at an automotive company for seven years and am very familiar with the concept of cost reductions – and the fact some decisions are very difficult to make when keeping the end consumer in mind. For example, did you know leather seats in most vehicles aren’t 100% leather? If you have ever see the phrase “leather seating surfaces” or “leather trimmed” or “leather appointed” in regards to seats, that pretty much means the places your back and bottom touch on the seat will be leather, but the backs, lower trim and possibly sides of the seat are made out of vinyl. Through reducing the amount of leather in a seat, the manufacturer is able to save a ton of cost while still providing a durable seat that “appears” to be 100% leather. Is this deception? Definitely. The key here is in the way the seats are described to the customer. The wording doesn't clearly call out that synthetic materials are also used in the seats.

Deception is an embarrassing practice that companies have grown to rely upon. And it’s definitely not something that helps obtain or retain customers. So how often do we as consumers have the “wool pulled over our eyes?” More often than we might think. The automotive leather seats an... just one example. Another? In 2006, there was debate in the meat packaging industry over the use of carbon monoxide to help keep meat look bright red. Consumers were upset thinking this practice was going to "trick" them in to purchasing meat that wasn’t as fresh as it appeared. Recently, we have been reading and watching news reports talking about food companies short-sizing products to help protect their bottom line as the cost to produce products continues to increase. Andrew Martin of the New York Times reported (“Ate a Whole Pint? Check Again”) about a study Consumer Reports had done on this practice. "The magazine surveyed consumers in July and found that 75 percent had noticed that packages were smaller and that 71 percent believed that the main reason for the change was to hide price increases from consumers.”

Short-sizing isn’t a new phenomenom. In January of 2001 (yes, almost 8 years ago), Greg Winter wrote an article entitled “What Keeps a Bottom Line Healthy? Weight Loss.” In it, he discussed how Frito Lay had been putting fewer chips in a bag to help cut costs – i.e. conducting "weight-outs." He stated “It is a subtle way of earning more from everyday products without scaring off price-conscious shoppers, and it is quite legal as long as the package accurately describes what is inside.” But even if the box says how many ounces it contains, is the practice really ethical? Currently, when looking at some short-sized products placed side-by-side to their former model, you can't immediately discern a difference. An Apple Jacks box, for example, is the same height and width but is thinner on the sides and Skippy Peanut Butter looks the same unless you turn over the jar and compare the indentations at the bottom.

The sad thing is not only are these companies being deceptive in their short-sizing, but they aren’t even admitting they are doing something wrong. In fact, many claim these actions have been demanded by the customer. Back in June of this year, ABC 7 News in Arlington, VA conducted an investigation on products that had been short-sized. Kris Van Cleave reported on the following statements from companies. Karen May from Tropicana said the new 89 oz (ilo 96 oz) juice container “makes it easier for any consumer, especially children, to pour a glass of juice.” James Malone, spokesman for Georgia Pacific in regards to Brawny reducing the number of paper towel sheets from 110 to 88 per roll said “It’s a thicker towel…what the research showed us is they (the customer) needed to use fewer sheets per task.” A couple of weeks ago, CNN Money ran a story called the “Incredible Shrinking Cereal BoxThey reported “many food companies say their customers accept, and appreciate, the choices they must make to maintain a quality product in the current economic environment." In March, Brandweek quoted Paul Chibe of Wrigley’s with saying that customers wouldn’t mind smaller sized packages of gum because "To them the value goes up because they're getting a better tasting product in a better package. Price is not the way the consumer is looking at this.”

Not too long ago, I remember purchasing cereal that advertised “20% More Free!” at the top of the box. With the latest weight-outs that have been occurring, I wonder why these food companies haven’t been advertising “Now – with 25% less!” OK – I don’t wonder…that’s not something you want to advertise. So if you don’t want to advertise it (or want a bunch of people blasting it all over the web, on the news, etc. when they find out), why do it? Unless you’re talking about a waist-line, most consumers do not think of shrinkage as a good thing. This is America where portion sizes at restaurants are often enormous, fast food meals can be super-sized, and people buy food in bulk at places like Sam’s Club and Costco. So is this practice of short-sizing good for business? Carol Tucker Foreman of the Consumer Federation of America once stated ''If you want to keep faith with the customers, be honest with them.'' As marketers we know sometimes we tend to s t r e t c h the truth. We know that sometimes our ads contain fantasy and dreams, glitter and make-up. We airbrush out flaws. Why? Nothing really looks as good as we want it to and to the customer (we think) bigger, more, flashier is better, right? But is some of this deception harmful to our brands? The answer is a definite “yes.”

Walletpop quoted Harry Balzer of the Consumer Research Firm NPD Group. "People typically spend 10 percent of their income on food and that won't change, he said, so instead they're looking for deals, eating less or changing brands.” So if we think customers may start to switch brands, we panic. We can’t up the price on the current box (we think). So we choose to put less in or change the package so it holds less and see if the customer notices. But when consumers find out about this practice they may feel cheated and start thinking your brand is dishonest. Maybe this isn't the only thing you're hiding from them. Could your plant conditions be unsanitary? Maybe those natural ingredients you list on the box aren’t actually so natural. We know that due to the internet, consumers are now more educated than ever and aren't afraid to share their reviews of products/companies with everyone. So it will be interesting to see, as more and more of these short-sizing actions occur, which consumers will actually bite and which ones will bite back.

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