NAME BRAND VS. GENERIC BRAND CEREALS. brand. As I was watching the NBA playoffs, I ate an entire bowl of Malt-O-Meal Tootie

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1 NAME BRAND VS. GENERIC BRAND CEREALS As I sat down to work on this project I thought I should at least know what I Jeremy Innes ACE 270 PROJECT 4/29/00 prefer and see if I can even tell the difference between a generic brand cereal and a name brand. As I was watching the NBA playoffs, I ate an entire bowl of Malt-O-Meal Tootie Fruities. I then refilled with a bowl of Kellogg s Froot Loops and continued to watch my game. By the time I was done eating my Froot Loops, I really wasn t surprised by what I discovered. I can t believe how many people are getting ripped off because they are too good for generic brands. This is the issue in today s cereal market. Generic or name brand--that is the question. A few weeks ago while shopping, I decided to check out the market to see how different the prices of cereal were. I knew going into it what to expect just from the history of my mother not wanting to buy too much cereal just because it was very expensive. She would tell us that we better eat the whole box because she wasn t about the waste four dollars on a box of cereal. Even at my young age I knew that was way too much to be paying for a box of cereal. As I went through Schnucks and County Market, I couldn t believe what I was seeing. I, for the first time, actually looked to see how big of a price difference there actually was. I didn t think it would be that obvious to the naked eye that the price differences were that extreme.

2 County Market Prices $ $ $2.50 $2.00 Prices $1.50 $1.00 $0.50 $0.00 Malt-O-meal Tootie Fruities Kellogg's Froot Loops Malt-O-meal Coco-Roos General Mills Cocoa Puffs Malt-O-meal Honey Buzzers Quaker Cap'n Crunch Malt-O-meal Marshmallow Mateys General Mills Lucky Charms Malt-O-meal Honey Nut Toasty O's General Mills Honey Nut Cheerios Malt-O-meal Frosted Mini Spoores Kellogg's Frosted Mini Wheates Malt-O-meal Golden Puffs Kellogg's Smacks Malt-O-meal Corn Bursts Kellogg's Corn Pops Product

3 Schnucks Prices $4.50 $4.00 $ $3.00 Price $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Malt-O-meal Tootie Fruities Kellogg's Froot Loops Malt-O-meal Coco-Roos General Mills Cocoa Puffs Malt-O-meal Honey Buzzers Quaker Cap'n Crunch Malt-O-meal Marshmallow Mateys General Mills Lucky Charms Malt-O-meal Honey Nut Toasty O's General Mills Honey Nut Cheerios Malt-O-meal Frosted Mini Spoores Kellogg's Frosted Mini Wheates Malt-O-meal Golden Puffs Kellogg's Smacks Malt-O-meal Corn Bursts Kellogg's Corn Pops Brand

4 The most outrageous thing about these prices is that the manufacturers don t even try to hide the price difference from you. It s right there in front of you in black and white and because of two reasons, loyalty and laziness, the higher priced items will continue to dominate the generic brands no matter how high the prices go. Some of the biggest price differences discovered were Lucky Charms, Corn Pops, and Cap n Crunch. Some of these, namely Lucky Charms, have a price difference of almost $1.40 per box. Is there really that much of a difference in taste? I can t understand how anyone could pay that much more per box without even figuring out if it tastes $1.40 better than the generic brand. Truly, people should take time to look at these price differences. In some cases, someone s budget for food could be high enough that they don t care, but as most of us who are in the middle class can t afford to buy without comparing the prices and tastes of an item. In a typical battle between higher vs. lower priced goods, people will often choose the lower priced good because they don t recognize a significant difference. This doesn t even have to pertain to the food market. Suppose you re shopping for lawnmowers, and a lawn mower is a lot cheaper than another one you are looking at. You ve heard of the higher priced one, but the salesman tells you the unheard of brand is just as good. If the price difference is over fifty dollars, you would strongly consider the lower priced mower an option. This doesn t happen in the cereal market. People usually go with the proven cereal that they have heard of because they think it tastes better. Granted, some people can tell a little difference in the taste. However, the majority of people buy the name brand not because they know it tastes better, but because they are loyal to that cereal and will always choose that over any generic brand no matter how high the price is.

5 Laziness is the other key to keeping the higher priced cereals in business. Most people go to the store and don t want to spend all day there comparing prices. For the majority, people are always on the run and can think of more important things to do than compare cereal prices, so they grab the one they always get. Probably at least half of them don t even read the price tag. It s become such a routine that the producer could raise the price immensely and they would probably still get as many sales as before because consumers are lazy. As long as people stay loyal and lazy, these companies will still be making enormous profit. However, consumers don t realize that they are getting ripped off and are paying way too high a price for these goods. The consumers will continue to pay the price until they choose to look into the products for themselves.