Sunday 19 June 2016

Product Marketers have a Valueable Lesson to Help Hide Changes

Often when a habit fails, it's because the change is too dramatic for our routine-obsessed "animal brain".  There is something we can learn from major food manufacturers to help.

If the price of a product increase, we will usually notice this.  It is a conscious component that we are confronted with every time... last week this was $6.49, and this week it's $6.99.

So to absorb the increased cost of raw materials and transportation, manufacturers are quietly changing another number; the package size.  What was once 650 ml is now 600 ml. 

This is a great way to change habits... a tiny bit at a time, and do so by starting "around the edges".  Marketers know better than to hit the consumer "cold turkey" with a shocking price increase, as their customers will react, and perhaps not in a favourable manner.  So have the price increase accompany a promotion, or for a larger size (which you then gradually reduce in size.)

I remember this phenomenon during the hey-day of the 1970s when inflation was running in the high single digits (and eventually low double-digits) in Canada.  My favourite brand of Hostess Potato chips were .10 cents.  And then Hostess came out with a "new, bigger size" for .15 cents... effectively a 50% price rise.  Months later, the old size disappeared and only the new "bigger size" was available.

But it was the 70s, so they were already planning their next price increase, which was a shocking 67% increase (I'm actually;y figuring this out for the first time, and I'm shocked!)  There was suddenly a .25 cent bag of chips... which was bigger... but at the same time, the previous big bag became the same size as the old regular size.

And so it continued throughout the 70s and early 80s, as the price went to .50, then .75, then .99... and everytime there was a bonus offered while we acclimatized to the new higher prices.