Marketing Tricks: Smaller Packaging Will Cost You More!
I was walking through the grocery store, checking items off the list as they were found and put in the cart. It was a rather uneventful grocery shopping trip, until I went down the chip isle.
I picked up a bag of store brand sour cream and onion chips thinking to myself how awesome it was that they only cost $1.99 a bag, and tasted every bit as good as any of the name brand chips. I then located the Ruffles Baked chips that were the object of my wife’s desire. The price label on the shelf said $2.65, which according to my memory was less than the $3.29 they normally cost. Assuming they were on sale, I put them in the cart, next to the other bag of chips. Looking down into my cart, it became obvious why the price had declined.
The Ruffles bag was much smaller than the store brand bag of chips.
In fact, the store brand package looked gigantic in comparison. I picked up the two bags and examined the label for how much product was in each bag. The store brand bag held 9.5 ounces, while the Ruffles bag only held 6.25 ounces. It appeared to me that Ruffles had reduced the size of the product along with the size of the bag. Back at home my wife helped me put the groceries away, and without a word from me she commented on the puny size of the bag of chips.
I decided to do a little price analysis to figure out exactly what the price and product size decrease meant to the average Joe. Assuming a bag of Baked Ruffled used to be the same 9.5 ounces as every other product on the shelf:
$3.29 / 9.5 = about 34.6 cents per ounce.
With the new size and price:
$2.65 / 6.25 = 42.4 cents per ounce
Even though the new product cost less, because the size of the package is smaller it actually represents a 22.5% price increase!
I’ve heard of things like this before with products such as toilet paper and coffee, too. The change usually comes with a new label that says â€œNew look, same great taste!â€ or some other flashy gimmick to distract the consumer from the fact that what they’ve really done is increase the price.
The moral of the story is, beware when a product changes their label or package size. Usually that’s not the only thing that’s changed.
How about you, clever friends? Have you noticed any products that recently just haven’t seem to have lasted as long as they used to?
Brought to you courtesy of Brock
Brock is a software engineer by day and personal finance blogger at night. He is a fitness junkie and enjoys grilling and smoking meat. Married with two children, Brock strives to improve his skills as a husband and father, and is always on the lookout to stretch his family’s budget as far as he can.