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Investment Lessons from Lucky Charms Cereal

Posted on the 29 March 2013 by Mdelp


investment lessons from Lucky Charms cereal
The “Magic Leprechaun” brought my kids a box of Lucky Charms cereal as a treat for St. Patrick’s Day.

This one box transformed my usual sleepy-take-forever-to-eat-their-breakfast-children into two child shaped tornadoes that whirled around getting their own bowls, spoons and milk and rapidly spooned delicious marshmallow and toasted oat goodness into their mouths.

I, on the other hand, having been called jelly belly by my wife one too many times, sat there eating my bowl of healthy-yet-taste-like-cardboard-no-fun-at-all-adult cereal while paradise in a box rested mere inches from my hands daring me like only sugary cereal can to grab it and shove handfuls of it straight from the box into my mouth.

The only way I could stop myself was to keep my mind busy by thinking up “Investment Lessons from Lucky Charms Cereal”. Enjoy!

  1. Expectations matter. The next morning I shook the box and got excited because there was still some cereal left yet after pouring the remains into my bowl I was crushed because there were no more marshmallows! Even though the remaining sugar covered cereal was sweeter than your typical adult-boring cereal I was unhappy because I was expecting even more sweetness. I’ve been disappointed in a similar fashion by investments that although they earned a profit the profit wasn’t nearly as great as I imagined it could have been.
  2. Size matters. My local grocery store sells a variety of sizes of Lucky Charms and they arranged the prices so bigger the box I buy the less I pay per ounce. Most financial firms have similar pricing structures with lower or even no fees the larger your account gets.
  3. Innovate. According to Wikipedia, Lucky Charms first appeared in stores in 1964 and since then there have been over 40 different limited edition marshmallow shapes over the years. Amazingly, 2012 was the biggest volume year in Lucky Charms almost 50 year history.
  4. Know your customer. Lucky Charms TV commercials are perfectly designed for their target audience of kids with a catchy jingle, bright colors, and several comments about marshmallows. Kids don’t care how about how much fiber they are getting per serving. Make sure the features you’re highlighting are what your audience cares about not what you think they might care about.
  5. Diversification works. The marshmallow treats make up about 25% of the volume of a typical box. I don’t think I would be willing to buy a box of 100% marshmallow treats for my kids nor would they be too keen on eating a box of 100% toasted oats.
  6. Innovate some more. Besides the original cereal, Lucky Charms also comes in chocolate flavor and cereal bars now.

All this discussion about Lucky Charms has made me hungry. Diet or no diet, I’m about to get my marshmallow treat fix on.

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