What price is right?

The_Price_Is_Right_2012_LogoAre you familiar with the widely-syndicated TV show “The Price is Right?

For those who have not encountered the game show, though it’s highly unlikely, the object of the games featured in the program is for the contestant to guess the nearest price of identified consumer products or if they can give the exact amount, the better. The one who makes the lucky guess wins a prize en route to the jackpot round where dream packages are at stake.

In our day to day activity as regular customers, we too are looking for simple “jackpots” in grocery stores, malls or shops. People love freebies, sales and items with discounted prices. That’s why it is not surprising to hear news about loyal customers of a certain brand turning their heads to cheaper brands especially today that prices of commodities are going up.

Philippine tobacco manufacturer Mighty Corp. Inc. was able to capture 20% of the country’s smoking consumers from a lowly 3% last year by selling cigarettes retailed at P1 per stick, which categorized the products under the low-end tier subject to the cheapest sin tax rate. The bigger chunk of the sales pie if with Philip Morris Fortune Tobacco Company (PMFTC) which sells its products at about P5 apiece.

The former is owned by the Wongchuking family while the later is jointly controlled by one of the world’s biggest cigarette firms and the group of local tycoon Lucio Tan.

Mighty Corp. Inc. legal counsel Miguelito Ocampo explained that while his company cannot comment on how other cigarette companies price their cigarettes, what he can say is that their  company can sell one-peso-per stick cigarettes because  Mighty does not pay royalty fees to foreign companies for the use of our brands of cigarettes. He also stressed that Mighty incur relatively lower overhead and production costs because it sources its services, management and materials locally.

If putting a tag price is a game, those companies who offer the lowest price are the ones who are seen are the frontrunners to win. The bigger winners of course are the consumers.

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