The Bank of Mexico predicted that inflation will not return to levels of 3 percent at least until the second quarter of 2023. Consumers are already feeling the repercussions of the high inflation rate that afflicts the Mexican economy.
As a palliative, some companies have reduced the size and quantity of their products to avoid making them more expensive. However, this measure can generate a deterioration in their quality. This practice is known as reduflation, a term that refers to the practice carried out by some companies, mainly in the food sector, of reducing the content of products while maintaining prices. This word is formed by the nouns reduction and inflation, following the anglicism model shrinkflationfrom shrink (reduction) and inflation (inflation).
Reflagging is a strategy of marketing that companies apply and that directly relates the concepts of quantity and price. In reality, it is a covert increase in the prices of the products, which constitutes a deception for the consumer, since in most cases the products can be purchased at the same price, but they receive a smaller quantity or portion than usual. .
This trick of the manufacturers aims to preserve the profit margin, alleviate the loss of purchasing power of consumers and the increase in production costs.
The BBC already spoke in 2018 of shrinkflation, something very evident in sweets and chocolates. In fact, over several years he analyzed products from 19 manufacturers and concluded that all but one had seen their quantity reduced. In addition, this reduction was not accompanied by a price drop. It was only done in 9 of the analyzed products and it was not even proportional to the content reduction.
The brands justify their strategy by equating production processes, higher import prices for raw materials, and transportation or labor costs. They also justify it in their concern for consumer health by ensuring that they offer less of the product because they have reduced the amount of sugar or have eliminated ingredients that are harmful to health.
Consumers often pay air at the price of potato chips, water with preservatives at the price of lentils, or plastic at the price of marzipan, increasingly indignant at a practice, albeit legal, as long as the amount of product sold, is downright dishonest.
Another example can be seen in the airlines, whose costs increase if the passenger chooses his seat, buys some travel insurance or if he decides to print his boarding pass at the counter or check luggage.
This marketer’s trick is based on the fact that consumers do not usually think in terms of the quantity of a product, but rather its price, due to the impact on the budget both for the pantry and for the rest of the expenses that have to be paid. cover. In order not to lose competitiveness, manufacturing companies adjust to the money that consumers are used to paying.
What brands do is adjust to the outlay that the consumer has to make. They even resort to the trick of offering quantities of product different from those of their competitors, to make it difficult to compare the price per gram or milliliter at the time of purchase.
Of course, consumers are affected, since they receive less product for the same or even higher price. Regardless of the adjustment made by the brands – price, quantity or quality – the impact is similar to what it would have been if there had been an increase in price. The final effect is the same as that of price increases: it inhibits or limits the purchasing power of consumers. In the end, what it does is reduce the purchasing power of the currency. If the products become more expensive, the consumption of the products is inhibited.
The riskiest thing is that some companies look for cheaper variants or varieties of the inputs they use, which naturally affects the quality of the products, in order to keep the consumer price unchanged.
Advertising acts as a troupe for companies in this deception of consumers.