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They’re often cheaper because the store increases the price of the competitors’ wares to make their own store-product more appealing. It increases the price to
by d2wa 7y ago
They’re often cheaper because the store increases the price of the competitors’ wares to make their own store-product more appealing. It increases the price to consumers.
Can’t both practices be wrong?
Grocery stores shouldn’t be allowed to sell their own brands that compete with the otherwise free market. It’s an abuse of their position in the value chain. Heinz Ketchup can’t compete with the store brand on equal terms when the store sets the prices for both products.
- akersten 7y ago> Can’t both practices be wrong? and an abuse of their market position? Sure. But my point is that no one is railing Kroger for putting their cheap pasta above the DeCecco. So it's hypocritical to call out tech companies for doing what physical retailers have been doing for ages. If we're not mad about the pasta, we shouldn't be mad about Flickr being #2 on the search for "photos". And if we are mad about Google Photos being #1, why aren't we mad about the pasta?
- d2wa 7y agoI’m mad about the pasta too. Price gouging is usually regulated internationally, though. E.g. groceries in India are labeled with a maximum retail price set by the manufacturer to avoid problems like this.
- mthoms 7y agoYour analogy is flawed. Google's value proposition is to provide the most useful/accurate results for your query. Period. That's Google search's "raison d'etre". Kroger makes no such (equivalent) claim.
- 50ckpuppet 7y agoIt's a free market, shop someplace else.
- josefx 7y agoSome of those shops use price dumping to kill all local competition when they move in. Try again.
- bmelton 7y ago> They’re often cheaper because the store increases the price of the competitors’ wares to make their own store-product more appealing Maybe irrelevant to the point, but in my experience that is very wrong. They're cheaper because: * they have approximately zero marketing costs other than the cost of the shelf space, which they have better insight to sizing than their competitors * They didn't have to spend as much testing and refining to develop a quality product, because they already have a good sense of what the market is after because they're copying something people want * They don't have to maintain a staff of salespeople working to negotiate their products into stores. They know exactly where their product is destined to go, and how much to produce to satisfy market demands. * Because they have split-tested the price against which users see their value brand as enough of a bargain to switch from Fruit Loops to Fruity-Ohs or whatever. Yes, there is a portion of that component that has to do with the margins applied against the name brands, but stores aren't marking up their competitors' prices beyond the normal markup, and just as an aside, if Fruity-Ohs were selling better at a price than Fruit Loops, the store would increase their pricing. TLDR, if the market agreed, it would be very possible for the generic brands to cost more than the name brands, but due to point 1 (marketing) that is extremely unlikely to happen.