Packages Shrink but Prices Stay the Same

Ice cream, chips, mayonnaise, cereal, etc. have all shrunk their packages but kept prices the same. Then today I found this piece that says cereal makers are doing it again:

Kellogg Co. is using smaller packaging while charging the same prices for five of its cereals sold in the United States, effectively raising their prices for the second time this year. The company started shipping the new boxes to stores in early June.

Boxes were reduced by an average of 2.4 ounces for 14 items sold under the Apple Jacks, Cocoa Krispies, Corn Pops, Froot Loops and Honey Smacks brands, said Kellogg spokeswoman Susanne Norwitz.

Why do companies do this? Because it's a way of taking a price increase that consumers often don't notice. With commodity prices increasing so much, most manufacturers HAVE to take price increase of some sort and this is the easiest way of doing it. As someone who's been in marketing for almost 20 years, I can tell you that it works from a business standpoint. Not saying it's right to do, just saying it works.

Comments

[Mike Hunt]

I think it's ok somehow. Maybe I will eat less and lose some more weight and so will other Americans and this is a good thing! One thing I've found is that when I eat less I get full with less. Conversely if I've been stuffing myself the last few days (from a business trip?) then I get hungry very easily and need to keep eating during the meal before I feel full.

I'm also in favor for reducing the portion size at most restaurants while keeping the price the same to offset costs. After travelling around the world a lot it's really quite amazing to see how large the American portions are!

-Mike

[Ken]

Nabisco Wheat Things are smaller sizes now too, but same price.

[Ken]

Meant "Wheat thins"

[rwh]

"Apple Jacks, Cocoa Krispies, Corn Pops, Froot Loops and Honey Smacks"

We would all be better off if those "cereals" disappeared entirely:)

But seriously, when you eat a large meal your blood sugar spikes, then crashes, creating a feeling of hunger. More frequent, small meals are less likely to result in cravings.

My personal price threshold is $4 for a box of cereal. I won't pay more than $3.99, even for a huge box (because it will likely go stale before we finish it). I wonder if anyone else has a price level for cereal, above which they won't buy?

[Dar]

Author writes: "As someone who's been in marketing for almost 20 years, I can tell you that it works from a business standpoint."

Can you also comment on practices such as increasing the width of a nozzle/opening to increase product use without a customer being aware? I've heard of such things as slightly increasing the width of the opening on a tube of toothpaste so the customer unknowingly winds up using more toothpaste, and I'm curious if you've seen such behavior during your marketing career.

Thanks!

[Angeline]

Businesses have to make do somehow...I've especially noticed this type of change with food serving sizes at restaurants...or at my favorite thai restaurant they stopped serving an egg roll with lunch, and instead you can buy an order of them as an appetizer...

As for price levels of cereals...I think for me it depends on what kind of cereal it is. I'm willing to shell out more $$ for the cereals that are better for me (higher in fiber, lower in sugar etc) than for some sugary cereal I suddenly have a craving for. Of course those "better" cereals are always in smaller packages with the higher price. =\ But that's better than a big box of sugary cereal.

[FMF]

Dar --

Yes, I have. Can't comment on toothpaste, but I know products like fabric softeners and detergents do this by making the cap bigger and/or making it deceptive to use (cap gets bigger but "line" inside cap is what is supposed to be used -- though consumers never notice it.) Fabric softeners can also reduce the number of sheets per box and make the sheets smaller -- though the box is the same size.

[Katy McKenna]

As far as price thresholds, I always have a price-per-pound or price-per-ounce in mind that I won't exceed. For example, for years my cereal price-per-pound max was $2. Now that some boxes are less than 1 pound in size, I'd have to adjust my threshold accordingly.

Another way to do it is to compare different brands of cereals side by side. If one is 26 cents per ounce and another is 14 cents per ounce, plus you've got a coupon for the cheaper one, it doesn't really matter how big or small the boxes are. At that point, for me, it also doesn't matter which one is our "favorite." But that's just me! :)

[Digital TV Converters]

My personal threshold for a box of cereal is about $1.50 now. I've been playing the Grocery Game for a few months now, and it's nothing to end up paying less that $1 for a box. Matter of fact, I ran out Friday and picked up 5 boxes (2 Golden Grahams, 2 Trix, 1 Coco Puffs) for $2.50.

Assuming I can't get name brand stuff cheap like this, I just buy the generic store brand in the big bags. Since they have the zipper seal, they seem to stay fresher much longer.

What bugs me most is ice cream. Seems like a half-gallon sized container is down about 2 cups from what it used to be. Kinda makes me sad. =(

[Todd]

I remember when McDonald's started making the Big Mac smaller (I now call it the Little Mac). I started needing to eat 2 of 'em to fill up but wasn't any heavier.

I can understand businesses doing this and don't have a problem with it. It's up to the consumer to pay attention.

["Mo" Money]

It is the consumers responsibility to check such things. But I can't help but feel cheated a little bit by these practises.

[Financial Goal]

There is really not much we can do. Businesses need to make a profit as well. With all the food prices going up especially with the current flooding issue, we just to make sure we double check the items we buy.

[Financial Goal]

There is really not much we can do. Businesses need to make a profit as well. With all the food prices going up especially with the current flooding issue, we just to make sure we double check the items we buy.

[Mike Hunt]

FMF,

Just to be a bit cheeky... when I first saw the title of this post I was hoping this wasn't going to be a post about Chippendales :-)

-Mike

[Anitra]

I eat cereal almost every morning, and I have some pretty strong preferences (I like a little sweeteness, but not a lot) - probably only 10 brands/flavors I know I'll eat. I always try not to buy a box (which lasts me 5-8 days) for more than $3 - if nothing I like is on sale, I'll buy something generic or stick with oatmeal until the next time I go to the store. If I see a brand I like for $2 or less, I'll stock up.

I like the taste and convenience of cereal too much to give it up, but as I keep getting less and less for my money, I find myself eating less cereal, either by substituting oatmeal instead, or by adding fruit or nuts to help control my portions without feeling deprived.

[Michael]

I personally don't like this at all. I would rather just pay more and get what I'm used to than have to run out and buy it more often. Besides, how long is this really sustainable? Before long, you'll have cereal aisles full of 'individual size' boxes and ice cream freezers with nothing bigger than a pint. At some point, it's unsustainable and in the process, you'll have lost the trust of the consumer because eventually they're going to notice.

I generally watch this practice and will sometimes go out of my way to avoid purchasing products that have undergone this practice. FMF, you so much as acknowledged that it's trickery and I personally don't like being thought of as a 'dumb consumer' because with each subtle downsizing or cap repositioning, or whatever the execs call it so that they can sleep at night, they're seeing just how dumb we are. (Disclaimer, I'm not blaming you personally, just saying)

[Fanny]

I am looking for thread like this today because yesterday I went to buy toothpaste and I couldn't find almost any for under $5! I don't know where you live but that's outrageous for this part of the country. These increases are scaring me.