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 “New look, same great taste!†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.
Geroltsteiner mineral water sold at Trader Joe’s – smaller plastic bottle than regular full sized glass bottle (didn’t notice the size difference until putting in fridge next to an older glass full-size one); only slightly lower price.
A bag of chips is supposed to have 16 ounces. It’s insane how much they have shrunk the bags and what you get inside over the years.
A good rule of thumb to also use is that if the packaging looks different ‘GREAT NEW LOOK’ chances are you are now getting less inside that amazingly well designed package.
Nice comparison. I was always wondering what the percentage of savings were for branded vs. Non-Branded.
@Lynn – Ah, another product that downsized without any indication to the consumer. 🙂 thanks for sharing!
@MoneyBeagle – the more I looked at the bag of Ruffles the more I laughed. It seriously looked like it could have come out of a vending machine!
@Ryan – Technically the comparison I made was the price per ounce between the old bag and the new bag. But, that being said, also included was the price of the Ruffles (6.25 oz for $2.65) vs the store brand (9.5 ounces for $1.99). I love those Great Value Sour Cream and Onion chips! 🙂
Most stores, on the shelf tag, list the price for the item as well as a per unit price. I’m not sure if a law was passed to require this, but I’ve seen it in every store I’ve shopped in.
It’s a quick and easy way to see how two different products compare to each other in cost even if they are different sized packages.
I always thought it was just my imagination telling me that everything in the supermarket was getting smaller. Glad to see it is actually true
@Shawn – I’ve seen these as well, and use them for in-store price comparisons. However, what I was actually comparing was what I remembered to be the old package size (it was no longer on the shelf so I guessed at it), and the new package size. Thanks for pointing that out though – it’s a great thing to know is there when grocery shopping!
@robert – the packages are definitely shrinking….do you think Ruffles is trying to tell me to eat less chips?? 🙂
Remember when ice cream was sold in half-gallon containers? Several years ago, they went down to 1.75 quarts, and now they’re only 1.5 quarts. I found out about that when I bought some ice cream at a self-checkout lane, which uses a scale to make sure customers aren’t bagging items they haven’t scanned. Apparently, the machine hadn’t yet been re-programmed for the smaller size because it refused to accept the ice cream due to the weight mismatch between what I scanned and what I bagged.
I also enjoy products that use the fact that they haven’t been downsized as a selling point. Jif peanut butter labels proclaim, “Still 18 ounces!” as though we should be thanking them for not trying to sneak a smaller size product on the shelf (they just jacked up the prices instead).
@Sara – I bought a “half gallon” of ice cream just today, and after reading your comment I went and checked the size…..it’s 1.75 quarts! I had no idea ice cream had been downsized – at least it wasn’t as small as 1.5 quarts. Seriously, I’ve been calling it 1/2 gallon this whole time – I feel ripped off!
Nice comparison! I always wondered about these things when they say that they have decreased the price by 10%, etc. Now I understand that they are not decreasing price but they are in fact increasing it and people are still attracted because they think that they are saving money when they aren’t. One time I was visiting a grocery store and there was an item for $2 and the next time I visited the same store I saw that the same item was on sale and the new price was $1.99. A lot of people were buying it because they were assuming that they are saving a lot of money on it when the price difference was really just one cent.
@Hunain – I’ve had a similar experience where I’ve seen a product be prominently displayed on an endcap – where sales items are usually displayed – with a huge sign that has the price, and a tiny sign that says, “everyday low price.” People throw them in the cart just because they think they’re on sale. Thanks for sharing your experience, Hunain!
It doesent hurt to call up the company & complain. At least then they know that the game they play is being noticed. I stopped eating ice cream for about 3 years when they went from half gallons to 1.5 quarts. Which is 25% less product for the same price. Then the year after dairy prices increased to the point 1.5 quarts (48oz) now costs twice what 64oz of the same product cost 4-5 yrs ago. This is just ice cream. I think they do the smaller package trick hoping the consumer wont notice & will keep buying whereas a straight price increase might make the consimer say “Maybe i dont need these fatty chips anyway”. I say increase the price & let the consimer decide if they want to pay more for the same item!
@WC – I agree with your reasoning….but in the case of the bag of chips it’s VERY noticeable. It honestly looks ridiculous. It’s almost the size you get out of a vending machine. 🙂
This is a classic for sodas :/ Hate it
@imbasse – I hear you…..the little bottles and cans are all the rage right now. A person can buy something small….OR you can buy this huge tanker truck bottle of soda. I just want to buy a 12oz can….and they’re almost impossible to find these days!