The cake mix people don't need any help staying in business...there are many different market segments out there when it comes to making cakes, and consumers who buy cake mixes tend to belong to the segment where low price is the paramount concern (even more so than those who buy grocery store cakes). If you are competing on price then this segment is important to focus on, but most people on CC tend to focus on end product quality instead.

In our experience end product quality has more to do with design, recipes, process, service, and consistency than ingredient quality, which is subject to diminishing returns -- once an ingredient is "good enough", paying more for a premium brand tends not to improve quality as much as investing in, say, improving recipes. Plus ingredient costs are variable, which can impact a growing business's profitability far more than fixed cost investments like R&D.

I must respectfully disagree on the fine ingredients vs. good enough. The fine ingredients are what make my products something that many people have never even tasted. I can taste the difference between name brand milk, sour cream, and heavy cream and the same products from a local dairy. Top shelf liqueurs and spirits are completely different from their cheaper competitors. And chocolate, what a difference! When all ingredients are the best, the product is superior. My homemade vanilla extract with Grey Goose is as different as a drink with Grey Goose or one made with $5.00 a gallon vodka. You cannot achieve a taste with inferior vanilla extract anywhere near the quality of this concoction. And yes, it is expensive. Even cocoa powders make an incredible difference.

Obviously, my recipes have been honed and my methods are consistent with the teachings of top chefs.

The question of flour and sugar are a quality/consistency issue that, at this level of baking, I am not leaving to chance.

As Jason said, there are customers at any price point, and there are customers who gladly pay for fine, gourmet ingredients.