It’s hard on consumers everywhere.
When consumer budgets are breaking under economic strain, you may NOT be able to increase your prices on a product.
But what if your costs are going up too?
Business Week has an excellent article on how corporations cut cost without cutting quality.
Wal Mart of course does this as part of their “Everyday Low Prices” strategy which constantly seeks to reduce costs, but for others it seems to be a new idea.
How can you cut costs without sacrificing quality in your work at home or small business?
Packaged food companies, under the gun to shore up profits squeezed by soaring commodity costs, are finding savings in unexpected places. So it was that General Mills (GIS) in recent months reduced the number of pretzel shapes in its Chex and other snack mixes to three, from 14. The company had pretzels in the shapes of the letters “H,” “O” and “T.” But research found (not surprisingly) consumers cared more about the variety of pretzel flavors than shapes. That move, combined with other manufacturing improvements, is saving the division more than $1 million a year.
In a similar vein, Minneapolis-based General Mills cut in half the number of pasta shapes it uses in Hamburger Helper, to 10. Food engineers and marketers even worked on the pasta bits so they nested together, enabling the company to shrink the box. That reduced the cost of raw materials by 10%. Chief Executive Ken Powell says General Mills had no choice. “With commodity prices increasing, we needed to think about how we generate productivity in a more powerful way.”
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