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Who Says Size Doesn’t Matter?
Don’t worry, it’s not what you think: we’re not writing about those “male enhancement” products you see advertised on TV.
We will talk about size; specifically, the size of some products you buy at the supermarket.
In case you haven’t noticed, there has been a constant i sneaky trend in recent years to reduce the size or content of standard size products… while maintaining the original prices.
When is a half gallon not a half gallon?
Does this sound like a trick question? It really shouldn’t, unless you use the “new math” on packaging products.
Dairy products come in standard sizes, right? Gallon, quart, pint, etc. And these measurements are clearly defined in terms of liquid volume: a gallon is 128 ounces; a quart is 32 ounces; and a pint is 16 ounces.
By this math, then, a half gallon would weigh exactly 64 ounces.
That’s why it caught my eye when I went to pick up a container of my Grovest and Favorite Tropicana Pure Premium Orange Juice.
I went to the dairy case, pulled out what looked like a half-gallon container, and then did a double take as I saw what was written on the bottom of the container:59 FL OZ (1.8 QT) 1.75 L
You will see it in the bin on the right. While this may not seem like a big deal, you can make some interesting observations.
The first, and most obvious, is the reduction of the amount of juice contained in the two containers: 64 ounces on the left, and 59 ounces on the right; a reduction in the total content of almost eight percent.
The second observation does not refer to what is different between the two containers, but to what is the same; that is, the size of the container itself.
That’s right, the container isn’t actually smaller, they just don’t fill it completely anymore, so it still looks like you’re getting the same amount.
It’s not just orange juice that’s experiencing this “shrinkage phenomenon.” Check out Breyer’s Ice Cream at the grocery store. Containers are now 1.5 quarts (75 percent of a half gallon) or 1.75 quarts (about 87 percent of a half gallon).
To make the smaller size harder to spot, they’ve kept the same lid as the original 64-ounce container, but reduced the height of the container as the reduced volume would be more noticeable with the ice cream than with the orange juice, which is poured instead of “squeezed”.
What else is being reduced?
If you start paying attention to things like this, you’ll start to notice this trend creeping into other products.
A bag of regular potatoes used to be ten pounds; now the “standard” size is eight pounds, a 20 percent reduction in size, with no corresponding reduction in price.
The same goes for sugar, which traditionally came in a five-pound bag, but now comes in just four pounds.
So don’t think this article is just some kind of “defense” or overt social commentary, there are two important marketing and business principles at work here.
Give the “why”
Anytime you make changes to what you provide, even if you add instead of subtract, it’s always important to explain. Because you are doing it
In the case of orange juice, the company’s official response to the smaller size was this:
“Reducing our 64-ounce carton to a 59-ounce carton was not a decision we made lightly. smallest in 20 years. When the supply of oranges goes down, the price goes up, which affects our costs.
Instead of raising prices, we chose to slightly reduce the amount of juice and maintain the price.
Our consumer research shows that most shoppers, when given the choice between a price increase or slightly less content, prefer to stay in line on prices.”
I guess it makes sense, at least it’s an attempt to explain his actions. Of course, I will be absolutely amazed that if the crop performance is good next year, they will go back to the full 64oz size or lower the prices to the smaller package.
My guess is that they will simply pocket the extra profits; but we’ll just have to stay tuned to see how this plays out.
Three ways to increase income
The second principle works here, though subtlyit goes back to something we’ve covered here before: the fact that there are only three ways to increase income:
1. Get more customers
2. Get your customers to buy more
3. Make them buy more often
Assuming a constant rate of consumption of orange juice or ice cream or sugar or potatoes, reducing the size of the unit sold will increase the frequency with which the product is purchased.
And if the price remains constant and the product is bought more often, simple math dictates that revenue will increase.
Who can say for sure if this was a deliberate strategy or just a happy outcome? But one thing is for sure: both of these strategies are powerful and effective, and you should find a way to incorporate them into your high-level business and marketing strategies.
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