The Company Behind The Biggest Consumer Brands

Post by 4clicknet » Sun, Jul 29, 2012, 1:26 PM UTC

patio11 wrote: post #4

Consumer product companies sort of foreshadowed what happened to food (+), is happening to clothes, and will probably eventually happen to everything physical. The fundamental product (soap, razor blades, etc) is done . It works, involves no novel technology, and can be created at infintessimal marginal cost by any player in the industry. (Try to guess what the price of the soap in a bar of soap is. If your answer is…

My understanding is that this comment is stating that there is a trend towards products having more or less identical functional features, but at different price points and that they will only be distinguished from each other by marketing. I would argue this has always been the case, from the day people first started trading goods instead of making everything for themselves. Whenever there are competing, nearly-identical goods in the marketplace, someone invents ways to distinguish them based on pricing, logos, fatuous claims, etc., but that happened a long time ago.

An interesting thing about FMCG companies and profitability:

BigCo selling a bar of soap for $4 has a similar contribution margin to GenericCo selling a bar of soap for $1. Why? BigCo has larger overheads (i.e., they have to promote and advertise, do consumer research, etc.). In fact, BigCos don't make much profit from categories like soap and laundry powder, but they need them to cover overheads.

Post by HRoark » Sun, Jul 29, 2012, 2:11 PM UTC

stock_toaster wrote: post #12

patio11 wrote: post #4

Consumer product companies sort of foreshadowed what happened to food (+), is happening to clothes, and will probably eventually happen to everything physical. The fundamental product (soap, razor blades, etc) is done . It works, involves no novel technology, and can be created at infintessimal marginal cost by any player in the industry. (Try to guess what the price of the soap in a bar of soap is. If your answer is…

> It is an observable fact that, for any particular basket of food, we pay less than our parents did. Is that true? I looked up prices of food for 1981[1] and compared it with similar data from 2011[2]. These appear to be grocery prices based on newspaper fliers recorded by some library in new jersey (only one data point but it was what google showed me). I wonder if there is any readily available restaurant pricing…

Compounding inflation over 30 years is much greater than the cost saving measures implemented by the consumer goods companies (supply chain optimization, improvement of packaging techniques etc.).

Re: The Company Behind The Biggest Consumer Brands

Re: The Company Behind The Biggest Consumer Brands