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Brand-Name Cereal

"Establishing product differentiation and aggressive brand promotion are key aspects of cereal markups. Production costs and retailer share make up about 36 percent and 20 percent of the retail price of cereal; the rest (44 percent) is average manufacturer gross margin.

"One of the most basic cereals, Kellogg's Corn Flakes, had the highest average retail markup of 43.5 percent. At the low end was an average 18.2 percent markup. Buying generic is a smart means of saving money, nearly 50 percent. Compare ingredients of name brand with generic — if the ingredients are the same, you won't taste much of a difference. In fact, most store labels (generic) are actually produced by the big-name brands. They just happen to use different packaging — packaging that didn't cost a lot in marketing dollars to attract customers. However, this difference in packaging results in prices that are as much as 50 percent cheaper!

"Compare the nutritional information and ingredient order of a favorite brand and a store label. Chances are, they will be identical and if so, you will be satisfied with it while saving a ton of money. Note: most stores offer a money-back guarantee on their own brands, so keep the receipt just in case."

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