Why are "value" products so cheap?

Nicki

Tim Harford who writes the Undercover Economist for the Financial Times did a good essay about this.

His argument is that all companies would like to be able to charge each customer a different price for the same product based on what that customer can afford and is prepared to pay. The way they do this is to create artificial differences in products so that those who can afford to pay more will do so. So in a coffee shop a small cup of coffee is £1.95, and a medium cup of coffee is £2.50 even though the incremental cost of an extra few mils of coffee and hot water is negligible. The coffee shop is able in this way to identify customers who are not price-sensitive and fleece them!

Similarly with value goods. The difference between value potatoes and Taste the Difference potatoes is usually packaging, and whether the variety in the bag is in season or not. As others have said, they may also not be uniform sizes or shapes. However if you grew them in your own garden, you'd be happy to eat them!

For things like meat, value products are more likely to have more fat, bone or skin which the customer has to remove for themselves, and may also be cheaper cuts of meat. Clearly it won't be organic or free range either but nor is the regular lines of meat sold in the supermarket, unless they are labelled as such.

irishwexford

I never buy value goods except on rare occasions value biscuits but on tv at present Tesco are saying their value bacon is same as others just left with the fat on so I may give that a try, I am happy to cut the fat off for the birds. When my children were small they would not eat any corn flakes other than kelloggs as lots of hard bits in there but now I do try supermarket own brand (not value) and its fine so I think own brands have improved a lot and saves money. Our favourite baked beans are Aldi, much nicer than the more expensive ones also their pesto.

foreign_correspondent

a lot of value foods are 'loss leaders' - sold at an artficially low price to get customers in - nothing wrong with that
I believe that value cheese is absolutely fine, but can be sourced from different produces depending on supply, so will not always be the same - nothing wrong with that either!
A lot of value fruit and veg is just 'funny shaped' - again, nothing up with it!
Value meat and eggs I avoid as I dont like eating mechanically reclaimed meat burgers, and I try to buy organic milk (from free range cows rather than ones in sheds) and meat from a good butchers. I would rather buy a pound of shin beef from a health cow, than a meat ready meal from some poor animal. also get free range eggs.

exlibris

irishwexford wrote: »

I never buy value goods except on rare occasions value biscuits but on tv at present Tesco are saying their value bacon is same as others just left with the fat on so I may give that a try, I am happy to cut the fat off for the birds. .

I find that Tesco value Middle cut bacon is far better than any of the branded stuff. It doesn't shrink under the grill and isn't too salty. It does come in slices of different thickness but I can live with that by cooking only half a slice of the thick stuff!

chunky79

My friend has just had to do her shopping last week trying to exclude lost of E numbers suggested by her sons doctor, anyway she spent 3 hours in Asda checking out all the labels and almost everthing she bought was value or asdas own, the named brands were packed with soem of the E numbers she has been told to avoid.

I swear by value baked beans, i love them one thing i do find is that there are more beans in heinz, branstons etc...and not as much juice.

Also my aunt worked at a factory years ago now and they sold all day breakfast tins to staff for £2.50 per tray of 24. They they sell at somewhere near a pound each.

I did a few shifts at a bread factory (agency work), they mainly supply M & S. Cheese Bread nyom nyom,... £2.39 in store to staff 20p. Alot of the time your just paying for the name.

DenBo_4

I love Value baked beans, they have a lot more sauce (or should I say "less beans") in the tin, and I love the sauce! I will try most value/smartprice/basics stuff, but I must admit some of it is dire. Smartprice custard (in a packet, makes a pint) is eeeewwwwww, tastes nothing like custard to me.

purpleivy

chunky79 wrote: »

My friend has just had to do her shopping last week trying to exclude lost of E numbers suggested by her sons doctor, anyway she spent 3 hours in Asda checking out all the labels and almost everthing she bought was value or asdas own, the named brands were packed with soem of the E numbers she has been told to avoid.

I swear by value baked beans, i love them one thing i do find is that there are more beans in heinz, branstons etc...and not as much juice.

Also my aunt worked at a factory years ago now and they sold all day breakfast tins to staff for £2.50 per tray of 24. They they sell at somewhere near a pound each.

I did a few shifts at a bread factory (agency work), they mainly supply M & S. Cheese Bread nyom nyom,... £2.39 in store to staff 20p. Alot of the time your just paying for the name.

My dh used to do work for P**k Cakes, which produced for big names including M&S. He used to bring stuff home from the factory shop. Then they had to do stuff in their lab at work, once the buckets of chocolate and chocolate icing had been out of the factory they couldn't go back, That was real MS, but not desperately good for the figure!

lightisfading

ahh, consumer psychology is a wonderful thing i've worked in many shops and learnt that if you offer someone a cheap, medium and highly priced item, they'll almost always go for the middle one. Whereas if you offered them 2 choices theyd go for the cheaper one. So:

item 1) is £1
item 2) is £2
item 3) is £3

given 1, 2 and 3 as choices, the majority will go for 2, as they don't want to appear too 'cheap'. given 1 and 2 they'll go for 1 so they dont spend too much. some people will always go for 3 to make themselves look good :rolleyes:

so they could just sell you the basic and the high quality range, but they know most people will spend a bit more just to make themselves look/feel better (even though those basics prices are still acting as an advert to bring people in)

same applies to many cosumer goods.. i used to sell cameras and adding a higher bracketed one was a sure fire way of getting them to go for the middle range one rather than a cheapy.

Olliebeak

I really cannot abide the premium brand beans now. I find the sauce far too thick and sweet - SmartPrice every time in this household!

shazrobo

smartprice plum tomatoes, are less tomatoes, and more juice, prefer the named brands

love aldi beans though

and aldi soap powdr tablets