Advertising Fails the Truth Test

Oh dear! Agamedes discovers that an advertisement may not be the absolute truth!

Do you need new -- lateral -- thinking for your own problems? email nick leth at gmail dot com. Need solutions? No worries. Now.

Coles had a double-page ad in The West, on 4 Jun 2010 and other days. The giant heading on the second page is, "Down down Prices are down". I checked some of the facts.

There are two sample sales dockets showing the "was" and "now" prices of a range of items. The total of the "was" docket is $164.39, the "now" total is $148.35. "Quality food costs less at Coles", is the claim at the foot of the page.

Beware of selective sampling

NIVEA VISAGE FACIAL WIPES 25 PK is on the list:

• Nivea price as it "was": $6.99. Price as it is "now": $6.50. Claimed saving: 49 cents.
  
• In the six months between 3 Dec 09 and 3 Jun 10, we bought nine of the 25-pack Nivea facial wipes. The average price was $6.54 -- giving an actual "now" saving of just four cents.
  
• To get that average price, I played my own games with statistics. When the price was at $5, we bought two packs. So $6.54 is the average price that we paid. The average price on offer -- sampled on dates when we actually bought the product -- would be $6.74. See what a difference you can get with some selective sampling?
  
• The maximum price that we paid was $7.62.
  
• The minimum price that we paid was $5.00. Yes -- just $5 -- $1.50 cheaper than the advertised "now" price. Why are Coles not able to hold the price at that low $5? The facts are, that $5 is a possible -- an actual -- price. So why are Coles so pleased to sell at $6.50 -- which is 30% above a price that they were able to offer within the last six months?
  

The Coles ad claims that "Prices are down". In truth, prices are -- if the "now" docket price is actually available in the shops -- prices are way up (30%) on the minimum, somewhat down (17%) on the maximum and a bit down (between 0.6% and 3.7%) on the average.

There are several possible lessons from this ad:

1. If prices are held steady at the advertised $6.50, the average shopper will save a few percent, if they continue to shop at Coles.
   
2. If prices continue to jump up and down, a shopper can save even more by buying when prices are low. (But check the next section of this post.)
   
3. Advertisers can "prove" anything, with selective sampling.
   

Aged items on sale

Call me slow, if you like, but it was my wife who pointed out the basis for some Coles cost reductions: the items are about to expire. Why is the price so low? Check the use by date.

Over the last six months, the price of Uncle Tobys Vita Brits has varied, in our local Coles, from $4.00 per kilo to $4.99 per kilo. That's a variation of 25%. It was my wife who spotted the key factor: the use by date... When Vita Brits are on special, it is likely that they will expire within six months.

We know approximately how fast we use Vita Brits. (And various other groceries.) If a pack were due to expire within a month -- that would be too soon. Six months is fine. What we have, is another factor to consider when buying on "special".

As an aside: Many years ago, I was browsing through a "discount computer goods" shop. Nothing I really wanted, I was just browsing. The only item that I could possibly want to buy, was printer ink. Printer ink was marked, in that shop, as being sold at a huge discount.

I checked the price.

The "discount" ink was, in fact, more expensive than the ink that I had recently bought at a regular, brand-name shop. Worse yet, the ink being sold at an very expensive "discount" was past its use-by date!

Lessons can be learnt:

1. Check the use-by date.
   
2. Know how fast you use a product. Only buy -- even at a discount -- if you can use it before it expires.
   
3. Do not believe a shop that claims to sell at a discount. Check the prices at other shops!
   

A simple as a marketer's mind

There's a full page ad in The West of 8 Jun 2010, for MySolar, pushing rooftop solar panels for generating your own electricity.

Down the left of the page is a diagram of the steps taken to get network power to your house: hills blown up, dug out, transported... etc etc. Six steps involving explosions, burning, transport and so on. So very, very wasteful.

Down the right of the page is the one simple step to solar power: a solar panel to your roof. Isn't that so very simple? So, simple, green, economical... and false.

The ad shows sun powering a panel providing energy to your home. "As simple as it looks", says the ad. Now look at the truth:

To create that solar panel takes all of the blowing up, digging out, transporting, burning, etc, etc... that it takes to get energy through a network to your house. But that is just to get the energy to build the solar panel! Then there's the blowing up, digging out, transporting, etc, etc... to get the materials for that solar panel. Plus a bit of extra transport -- big trucks burning lots of fossil fuel -- to transport that solar panel to your house.

Look at the entire process. A solar panel is not at all the "simple" option. There are lessons here:

1. An advertisement is not the truth. An ad is designed to sell product to you, the consumer. An ad may lie by omission; an ad may be telling only a fraction of the story.
   
2. An ad is designed to present a specific message. There is no need to trust that message. Think before you believe.
   

Independent thinking & independent analysis of your problems by Agamedes Consulting. Support for your thought: email nick leth at gmail dot com