Pricing guru Rags Srinivasan snaps two Tropicana containers that he says follow a “proven principle” in creative packaging: Changes in size do not appear as large when made in all three dimensions versus when they are changed in just one dimension.
What’s the reason for making these changes?
Customers are trained on the price they pay – more often they buy a product at a price the more they become tuned to any price changes. The price they remember becomes their reference price – any increases over reference price will be seen negatively. So brands use the only other lever available to them for better price realization : reduce their marginal cost by 10-20%.
To Rags: Are certain categories of consumer products more disposed to constant creative packaging changes? Your comment seems to suggest that staples are product where we should expect these changes most frequently. Chips are one product where the bags are always changing. Who even know exactly what size tortilla chip bag they are buying now unless they look carefully? Why aren’t pasta sauce jars changing more? Or are they?
