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jerryking : kellogg   7

The High Cost of Raising Prices - WSJ
By Andy Kessler
July 30, 2017

The more prices rise, the more customers bolt. It’s like running up a down escalator and never getting to the top. With the stock market hitting highs just about every day, investors need to be wary of companies that raise prices to make their numbers. These stocks make for spectacular sell-offs on even the slightest earnings miss......I had a friend who worked at General Electric for decades. He told me that in strategy sessions with his management, Jack Welch would constantly berate them, saying, “Any idiot can raise prices.” Except he used a stronger word than idiot to coax them into squeezing out costs, adding features, improving services and generally delighting customers. Contrast this with Berkshire Hathaway . Vice Chairman Charlie Munger found that with See’s Candies “we could raise prices 10% a year and no one cared. Learning that changed Berkshire.” .........There’s a long list of price bumpers. Walk down any supermarket aisle. Kellogg’s prices constantly snap, crackle and mostly pop. Procter & Gamble toothpaste sizes shrink faster than my cavity count, always less for the same price. Now private-equity firms are circling P&G. Same for Nestlé . Expect rising beer and liquor prices soon....Empires are lost on rising prices. Until recently, rather than innovate in mobile or cloud computing, Microsoft kept raising the price of its Windows operating system to computer manufacturers. Tablets and phones ate their lunch. Fees rose at eBay until Amazon took its growth away. .........Increasing prices attracts others to attack your market. Amazon’s Jeff Bezos warns: “Your margin is my opportunity.”....Competition solves much of this problem. Investors love protected businesses, but eventually relentless price increases kill them all. Consumers are the kangaroo at the bar in the old cartoon: The bartender says, “Say, we don’t get a lot of kangaroos in here.” The kangaroo replies, “No, and with these prices, I can see why!” Call me a kangaroo, but I prefer to invest in companies that lower prices and offer more.
Andy_Kessler  pricing  price_hikes  drawbacks  margins  Charlie_Munger  CPG  shareholder_activism  P&G  Nestlé  Kellogg  Jack_Welch  GE  large_companies  cost-cutting  Amazon  Jeff_Bezos  staying_hungry  delighting_customers  high-cost 
july 2017 by jerryking
Breitbart Treats Kellogg to Its Smash-Mouth Style - The New Yorker
By Rob Walker   December 9, 2016

There are downsides to the efficiency of programmatic advertising. The reliance on machine learning and data crunching, rather than more subjective measures, can lead brands to display their wares in online environments they’d normally avoid—including fake-news sites, or highly partisan, provocative, and divisive ones—and they may not even be aware that it’s happening. It evidently took the involvement of human beings—a very small number of human beings, using social media—to make this clear to advertisers like Kellogg.
programmatic  Kellogg  Breitbart  advertising  online_advertising 
february 2017 by jerryking
How Can Big Food Compete Against Fresher Rivals? - WSJ
By ANNIE GASPARRO
Updated July 12, 2015 1

it is a two-part problem. No. 1, the consumer and competitive marketplace is definitely shifting. For example, quality has evolved beyond just good ingredients, preparation and packaging. Basic quality is a given now; many consumers are looking for something extra: less mass-produced, natural, local.

No. 2, iconic food companies and their mature brands are not responding effectively. Large, established food companies and their brands are being managed as portfolios of revenue and profit streams with a short-term financial orientation, and not as companies that produce food products. Small companies, on the other hand, are being created and managed by people with a food orientation and passion.
CPG  Kraft  emotional_connections  Nestlé  Coca-Cola  food  Pepsi  Big_Food  trends  Kellogg  passions  gourmet  foodies  decreasing_returns_to_scale  shifting_tastes  small_business  SMB 
july 2015 by jerryking

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