November 17, 2008
Spot the Difference or Not
By Bernice Hurst, Managing
Partner, Fine Food Network
In an effort to maintain
margins and avoid increasing prices, manufacturers are conjuring up ways
to change packaging so that consumers don’t notice reduced content.
Jerry Hirsch, writing
in the Los Angeles Times, describes one particularly creative effort. "A
careful look at the jars of Skippy (peanut butter)… may reveal a surprise.
The prices are about the same, but the jars are getting smaller. They don’t
look different in size or shape. But recently, the jars developed a dimple
in the bottom that slices the contents to 16.3 ounces from 18 ounces —
about 10 percent less peanut butter."
Mr. Hirsch’ report mentions
other staples as well. Soap can be a half-ounce lighter, he said, and toilet
paper narrower. Consultant Frank Luby was quoted as saying that subtle
changes may "create the illusion that you are buying the same amount."
Eagle-eyed shoppers would
have to examine packaging and labels even more closely than ever, and remember
what they said the previous week or month or year, to spot the difference
in many cases. Whether they care or not, as long as it doesn’t cost more,
is another story.
Such practices are not
unique to the American market. Sean Poulter, in British newspaper The
Daily Mail, cited a lengthy list of familiar brands and products that
have downsized in content, some dating back to the 1990s.
Mr. Hirsch pointed out
that, while shoppers may understand the reasons, they still feel manufacturers
are not being honest. One interviewee expressed the frustration and lack
of trust she now feels because of "chronically deceptive marketing
ploys." Other comments, in both articles, endorsed her views. Shoppers
are aware of what is happening and feel they are being taken advantage
of. Manufacturers defend themselves by explaining that weights are printed
on the packs and that they are trying to achieve a balance between higher
costs for ingredients and reasonable prices for customers.
Discussion
questions: What do you think about vendors reducing packaging to maintain
certain price points? Are such strategies harmful to the consumer relationship
or is maintaining certain price points critical in a period of rising
costs?
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Being mindful of the challenge that manufacturers face with increased costs and the worry about higher prices hurting sales, any deceptive packaging erodes the trust considerably. An obviously smaller package isn’t so bad, but the example of the dimple in the bottom of the same sized jar of peanut butter is really bad. It is bad enough to cause consumers to switch brands. One problem that reduced sizes create is that many recipes call for the standard size package and when that is no longer available you then have to purchase two packages.
My advice to manufacturers is to treat their consumers with respect and not try to fool them with what they think are cleaver packaging gimmicks.
Oh, come on! Manufacturers of the world, take note: your customers realize that you’re trying to bamboozle them, and they hate it. “Cheater packs” are eating away at your brand integrity. You should probably go online and take a look at what your former customers are saying about you and your slimmer-than-previous boxes, and your feeds-two “half gallons” of ice cream….
It’s rude and insults the intelligence of the buyer, which makes it risky.
My very favorite is the downsized individual water bottles described as “green, using less plastic.” Ayiyiyiy!
This could be turned into a very good thing with the right message. Talk to any retailer and they’ll tell you that the best way to be “green” for most of them is to REDUCE PACKAGING. So, if you’re reducing packaging to save cost AND be green, it’s a win-win for consumers and manufacturers.
Surprised no one’s taking that positive spin yet.
I came of age with this practice thanks to a career in the cereal and snack food industries. Initially, pack size changes were a way to combat making the very noticeable–and painful–leaps from one key price point to another. The classic example was the panic that ensued when the vending industry was faced with the specter of going to “a two-coin vend” (i.e. above a quarter).
Consumers became increasingly aware of this common tactic in the ’70s and ’80s–leading to the industry standard of “cost per ounce” comparison pricing on shelf tags. For consumers who care to look, there are no more secrets on this score.
As many have suggested, there is benefit in reducing the amount of packaging when downsizing content weight. Most shoppers are looking for value in products, not the largest pack in the category. Label and graphics must clearly describe the product, as shoppers are more careful than ever in making the purchase decision. They read labels closely. A clear marketing strategy is needed–good package design will communicate the value message. Clarity of message is key.
This is a time when people are justifiably distrustful of many governments, institutions and corporations (too numerous to name). Yet, this is an opportunity for solid, grounded, well respected consumer brands to really shine and rise above the fray. They will do so if they take the right path and don’t try to be sneaky and scam their customers on sizes. Vendors can reduce the outside packaging in order to be green all they want–and brag about it–as long as the contents and net weight of the product INSIDE remain the same.
If cooks and gathered families all over America find out on Thanksgiving that Great Grandma’s classic comfort food recipe was ruined because the necessary ingredients were not in the usual can or box this year, there will be heck to pay!
On one side of the question, whether marketers are attempting to deceive the customer; this is definitely wrong. The loyal customer who expects a product to go far in regular household usage might not notice a difference until they come up short. Will the next thing be cheap substitutions for costly, quality and key ingredients in products?
On the other side, as it relates to food products, cutting down on quantity may be a good thing in America as too many are over-weight or worse. So a smaller jar of peanut butter might be a good thing – so long as the shopper doesn’t buy a second jar to make up for the difference.
As Cathy noted, we always called them Cheater Packs in the supermarket bidness. My first exposure to them was in college before I was officially a supermarket guy, but was managing a 7-Eleven. It was M&M Mars, and they downsized the Snickers. They seem to have done OK in the decades since. This is not a new phenomenon, and it happens all the time. All the time.
Ben Ball ‘nocked the nail on the noggin as usual. The government jumped through the many hoops insisted upon by consumer groups and mandated cost-per-ounce packaging information, which has appeared on nearly every relevant label for consumable products for a long time. Now it’s up to buyers to beware, a caveat emptor kind of thing.
I’ve found references to the downsizing of frozen orange juice cans in a price war in the late ’40s. This sort of thing makes headlines every few years, when some young reporter “discovers” it and it makes “news” again. Sort of like how the FTC “discovers” slotting every few years, and the papers are full of outraged stories about it until, well, until it goes away. I think there’s opportunity here to tap into the sustainability initiative and downsize the packaging (if possible) and keep the product the same–all the while being upfront about everything and perhaps even promoting it. What with media more ignorant and more given to breathless hysteria than it was a generation ago, and with blogs etc. achieving enough critical mass to move the needle, you do something sneaky today at your own serious peril.
Downsizing the package has been going on for years. It slows down when inflation is low and increases when inflation is higher. A one pound can of coffee is 13 ounces today. It represents a hidden price increase for consumers. The package size may be the same, but the repeat purchase time period reduces. A majority of consumers don’t read the package size when replenishing the pantry. Sometime later they realize they have been taken. This opens up a new buying decision the next time they are in the store. This is the risk.
If you have a good quality product, you would not try to trick the customers. A colleague of mine owns a hamburger chain. He makes a good hamburger that is very popular. When the price of the raw materials goes up he simply raises his price rather than reduce the size of burgers or the quality. It’s worked out well. He told me never go backwards in size and quality to appear price competitive, the customer will figure it out and you will get a bad rep. And thanks to consumer reports on TV, all those companies that tried to trick the consumers are being exposed.
As with most things, this will only become a major problem if the media gets on the story. Remember the fiasco when someone discovered the Liquid Paper brush didn’t actually reach to the bottom of the bottle?
If 60 Minutes or Dateline takes this on, manufacturers will find themselves with a PR nightmare on their hands. And it will be well deserved. Whatever happened to ethics?
This is a tightrope! Customers are starting to notice smaller packs and changes in volumes. What is a vendor to do? Increasing prices is not a good move at this time. My advice to vendors from a customer perspective is to try to achieve a balance. A smaller pack decrease with an even smaller price increase will still cause complaints but the effect would be less severe than having either a large decrease in size or a larger price increase alone. Don’t forget the POP explaining yourselves to your customer!
Manufacturers are caught between the proverbial rock and a hard place. If they shrink the size of packaging, they risk being criticized. If they keep packaging the same, but reduce the volume of product, they risk being criticized. There is no easy answer for this dilemma. Either way, consumers feel the pinch and are upset.
The best solution is to be honest with consumers and not disguise the shrinking quantities. Everyone knows that prices have gone up for manufacturers, and as much as they don’t like it, some of those price hikes will be passed along to consumers.
I have noticed. It is distressing and breeds distrust. It’s no wonder the power of the peer to peer network is so influential consumer shopping behavior. Our recent shopper research revealed some cultural shifts that are quite troubling for brands, and one of them speaks to this. Distrust is on the rise from a pricing standpoint as well, as consumers seek to determine if they’ve “been had” by the process. It’s time for more honesty and authenticity in order to prevent the consumer from shutting down purchases to a mere trickle.
A little tricky, right? I think vendors should be careful not to underestimate the consumer’s intelligence. The smart thing may be not to reduce product content but reduce packaging altogether. Consumers would applaud this move. There is such waste in the packages within the packages, etc. My advice: save the landfills by reducing packaging, not product!
Certainly, any effort to downsize price point through downsized packaging must be done fully expecting shoppers to notice right away. Shoppers are reading unit pricing more than ever and it would be naive for any manufacturer to think pack reduction is a subtle technique.
That said, reducing absolute price point can be highly effective in this cash-strapped economy. Gone are the days when $10 combo packs of peanut butter are easy for households to swallow. We all might be better off with smaller packs, consuming less, and with less waste in the system.
It may not be about price points but about profit margins; in a period of rising costs, you can either take your price up, reduce the package size, or cut your profit margins. Most consumers don’t notice a small reduction in package size, but at the same time, most consumers don’t remember what the package size they buy really is–we tend to think in terms of small vs. large, not in ounces. It is an empirical question–manufacturers would do well to test the impact of price vs. size changes–we do this all the time.
A note to single-serve product manufacturers–there is a danger that you downsize too far and that the serving isn’t satisfying. This will exacerbate your problems.
It is a very interesting phenomenon that the 13 oz can of coffee is still called a pound. How long ago did the industry go that way? 15-years ago? More? But, I would venture to guess that most people do know that the thing they call a “pound of coffee” isn’t.
I am disappointed to say that the packaging changes and price point targeting do work in the short term, though I think price points are becoming less and less of an issue. I think that as absolute price points increase, consumers pay more attention to the unit price. Once the “99 cent” price points are broken the all bets are off.
The other thing that bothers me is that the packaging of a product is generally a cost that is not related to the volume in the package. Therefore, the manufacturer actually cuts their per package margin if they cut the volume. Why not go the other way? Make the volume larger, increase the per package margin and give the consumer a better deal?
While I agree with other comments that manufacturers are not intentionally attempting to deceive consumers, I think honesty in messaging and packaging is critical. This may be one of the toughest economic times that we have experienced–and there is an entirely new generation of consumers who have never been pinched by the economy, let alone devastated by higher prices, lower wages (or job loss) and mortgage crises.
Savvy manufacturers will find a way to communicate the necessity of package downsizing and price changes with grace, dignity and honesty. And those manufacturers will be the ones that consumers remember after this crisis has passed.
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Being mindful of the challenge that manufacturers face with increased costs and the worry about higher prices hurting sales, any deceptive packaging erodes the trust considerably. An obviously smaller package isn’t so bad, but the example of the dimple in the bottom of the same sized jar of peanut butter is really bad. It is bad enough to cause consumers to switch brands. One problem that reduced sizes create is that many recipes call for the standard size package and when that is no longer available you then have to purchase two packages.
My advice to manufacturers is to treat their consumers with respect and not try to fool them with what they think are cleaver packaging gimmicks.
Oh, come on! Manufacturers of the world, take note: your customers realize that you’re trying to bamboozle them, and they hate it. “Cheater packs” are eating away at your brand integrity. You should probably go online and take a look at what your former customers are saying about you and your slimmer-than-previous boxes, and your feeds-two “half gallons” of ice cream….
It’s rude and insults the intelligence of the buyer, which makes it risky.
My very favorite is the downsized individual water bottles described as “green, using less plastic.” Ayiyiyiy!
This could be turned into a very good thing with the right message. Talk to any retailer and they’ll tell you that the best way to be “green” for most of them is to REDUCE PACKAGING. So, if you’re reducing packaging to save cost AND be green, it’s a win-win for consumers and manufacturers.
Surprised no one’s taking that positive spin yet.
I came of age with this practice thanks to a career in the cereal and snack food industries. Initially, pack size changes were a way to combat making the very noticeable–and painful–leaps from one key price point to another. The classic example was the panic that ensued when the vending industry was faced with the specter of going to “a two-coin vend” (i.e. above a quarter).
Consumers became increasingly aware of this common tactic in the ’70s and ’80s–leading to the industry standard of “cost per ounce” comparison pricing on shelf tags. For consumers who care to look, there are no more secrets on this score.
As many have suggested, there is benefit in reducing the amount of packaging when downsizing content weight. Most shoppers are looking for value in products, not the largest pack in the category. Label and graphics must clearly describe the product, as shoppers are more careful than ever in making the purchase decision. They read labels closely. A clear marketing strategy is needed–good package design will communicate the value message. Clarity of message is key.
This is a time when people are justifiably distrustful of many governments, institutions and corporations (too numerous to name). Yet, this is an opportunity for solid, grounded, well respected consumer brands to really shine and rise above the fray. They will do so if they take the right path and don’t try to be sneaky and scam their customers on sizes. Vendors can reduce the outside packaging in order to be green all they want–and brag about it–as long as the contents and net weight of the product INSIDE remain the same.
If cooks and gathered families all over America find out on Thanksgiving that Great Grandma’s classic comfort food recipe was ruined because the necessary ingredients were not in the usual can or box this year, there will be heck to pay!
On one side of the question, whether marketers are attempting to deceive the customer; this is definitely wrong. The loyal customer who expects a product to go far in regular household usage might not notice a difference until they come up short. Will the next thing be cheap substitutions for costly, quality and key ingredients in products?
On the other side, as it relates to food products, cutting down on quantity may be a good thing in America as too many are over-weight or worse. So a smaller jar of peanut butter might be a good thing – so long as the shopper doesn’t buy a second jar to make up for the difference.
As Cathy noted, we always called them Cheater Packs in the supermarket bidness. My first exposure to them was in college before I was officially a supermarket guy, but was managing a 7-Eleven. It was M&M Mars, and they downsized the Snickers. They seem to have done OK in the decades since. This is not a new phenomenon, and it happens all the time. All the time.
Ben Ball ‘nocked the nail on the noggin as usual. The government jumped through the many hoops insisted upon by consumer groups and mandated cost-per-ounce packaging information, which has appeared on nearly every relevant label for consumable products for a long time. Now it’s up to buyers to beware, a caveat emptor kind of thing.
I’ve found references to the downsizing of frozen orange juice cans in a price war in the late ’40s. This sort of thing makes headlines every few years, when some young reporter “discovers” it and it makes “news” again. Sort of like how the FTC “discovers” slotting every few years, and the papers are full of outraged stories about it until, well, until it goes away. I think there’s opportunity here to tap into the sustainability initiative and downsize the packaging (if possible) and keep the product the same–all the while being upfront about everything and perhaps even promoting it. What with media more ignorant and more given to breathless hysteria than it was a generation ago, and with blogs etc. achieving enough critical mass to move the needle, you do something sneaky today at your own serious peril.
Downsizing the package has been going on for years. It slows down when inflation is low and increases when inflation is higher. A one pound can of coffee is 13 ounces today. It represents a hidden price increase for consumers. The package size may be the same, but the repeat purchase time period reduces. A majority of consumers don’t read the package size when replenishing the pantry. Sometime later they realize they have been taken. This opens up a new buying decision the next time they are in the store. This is the risk.
If you have a good quality product, you would not try to trick the customers. A colleague of mine owns a hamburger chain. He makes a good hamburger that is very popular. When the price of the raw materials goes up he simply raises his price rather than reduce the size of burgers or the quality. It’s worked out well. He told me never go backwards in size and quality to appear price competitive, the customer will figure it out and you will get a bad rep. And thanks to consumer reports on TV, all those companies that tried to trick the consumers are being exposed.
As with most things, this will only become a major problem if the media gets on the story. Remember the fiasco when someone discovered the Liquid Paper brush didn’t actually reach to the bottom of the bottle?
If 60 Minutes or Dateline takes this on, manufacturers will find themselves with a PR nightmare on their hands. And it will be well deserved. Whatever happened to ethics?
This is a tightrope! Customers are starting to notice smaller packs and changes in volumes. What is a vendor to do? Increasing prices is not a good move at this time. My advice to vendors from a customer perspective is to try to achieve a balance. A smaller pack decrease with an even smaller price increase will still cause complaints but the effect would be less severe than having either a large decrease in size or a larger price increase alone. Don’t forget the POP explaining yourselves to your customer!
Manufacturers are caught between the proverbial rock and a hard place. If they shrink the size of packaging, they risk being criticized. If they keep packaging the same, but reduce the volume of product, they risk being criticized. There is no easy answer for this dilemma. Either way, consumers feel the pinch and are upset.
The best solution is to be honest with consumers and not disguise the shrinking quantities. Everyone knows that prices have gone up for manufacturers, and as much as they don’t like it, some of those price hikes will be passed along to consumers.
I have noticed. It is distressing and breeds distrust. It’s no wonder the power of the peer to peer network is so influential consumer shopping behavior. Our recent shopper research revealed some cultural shifts that are quite troubling for brands, and one of them speaks to this. Distrust is on the rise from a pricing standpoint as well, as consumers seek to determine if they’ve “been had” by the process. It’s time for more honesty and authenticity in order to prevent the consumer from shutting down purchases to a mere trickle.
A little tricky, right? I think vendors should be careful not to underestimate the consumer’s intelligence. The smart thing may be not to reduce product content but reduce packaging altogether. Consumers would applaud this move. There is such waste in the packages within the packages, etc. My advice: save the landfills by reducing packaging, not product!
Certainly, any effort to downsize price point through downsized packaging must be done fully expecting shoppers to notice right away. Shoppers are reading unit pricing more than ever and it would be naive for any manufacturer to think pack reduction is a subtle technique.
That said, reducing absolute price point can be highly effective in this cash-strapped economy. Gone are the days when $10 combo packs of peanut butter are easy for households to swallow. We all might be better off with smaller packs, consuming less, and with less waste in the system.
It may not be about price points but about profit margins; in a period of rising costs, you can either take your price up, reduce the package size, or cut your profit margins. Most consumers don’t notice a small reduction in package size, but at the same time, most consumers don’t remember what the package size they buy really is–we tend to think in terms of small vs. large, not in ounces. It is an empirical question–manufacturers would do well to test the impact of price vs. size changes–we do this all the time.
A note to single-serve product manufacturers–there is a danger that you downsize too far and that the serving isn’t satisfying. This will exacerbate your problems.
It is a very interesting phenomenon that the 13 oz can of coffee is still called a pound. How long ago did the industry go that way? 15-years ago? More? But, I would venture to guess that most people do know that the thing they call a “pound of coffee” isn’t.
I am disappointed to say that the packaging changes and price point targeting do work in the short term, though I think price points are becoming less and less of an issue. I think that as absolute price points increase, consumers pay more attention to the unit price. Once the “99 cent” price points are broken the all bets are off.
The other thing that bothers me is that the packaging of a product is generally a cost that is not related to the volume in the package. Therefore, the manufacturer actually cuts their per package margin if they cut the volume. Why not go the other way? Make the volume larger, increase the per package margin and give the consumer a better deal?
While I agree with other comments that manufacturers are not intentionally attempting to deceive consumers, I think honesty in messaging and packaging is critical. This may be one of the toughest economic times that we have experienced–and there is an entirely new generation of consumers who have never been pinched by the economy, let alone devastated by higher prices, lower wages (or job loss) and mortgage crises.
Savvy manufacturers will find a way to communicate the necessity of package downsizing and price changes with grace, dignity and honesty. And those manufacturers will be the ones that consumers remember after this crisis has passed.