I took my four year old daughter to the Natural History Museum recently and we had an entertaining chat about evolution. As you can imagine, she had some very funny questions. And she’s convinced her little sister might be a little more closely related to a monkey than she.
Anyway, it got me thinking about branded products, and how most product evolutions have to do with margin improvement rather than better performance. Consumers may not notice one round of cost-cuts, but over time, the reduced product quality can get really obvious. Why is it that cereal boxes never close properly after you open them once? My guess is that that little "advance" caused a 0.4 point margin gain at some point in the 90’s. But, oh how irritating to consumers.
Of course, continuous margin improvement taken to an extreme gets hit by Darwinism too. Not from a pack of hyena. From a pack of private label – which actually seems to be getting better over time.