Sometimes the price on a product doesn't change for years and years, despite inflation's effect on all the products around it. There may be a logical explanation for this phenomenon, such as technological advances that have made production of the item more efficient. But often, the same-price phenomenon is actually a price increase. Known as product downsizing, the technique has for years been used by manufacturers to do an end-run around consumer awareness by leaving a price consistent while lowering the amount of product in a package.
A very careful, savvy consumer will note the difference many times. But far more often, these changes go unnoticed among the hundreds of items we buy. Either the practice is suddenly becoming more widespread in our current economy, or I'm finally getting wise to it on my ever more squeezed budget. Either way, the sudden realization I've been had hit home twice in the last couple weeks.
The first example came as the result of comparison shopping to make sure what I thought sounded like a good deal really was. I confess I'm a compulsive bargain shopper when it comes to the weekly grocery trip. I plan the next week's menu based on the local in-store specials of the curent week. When a recent circular advertised a sale on Hillshire Farms sausage, I was happy to fill in not one but two evenings' meals. When I got to the store, I saw that Hillshire Farms was actually one of several brands on sale, so I started comparing and discovered that, in contrast to Smithfield or the local bargain-basement brand, Hillshire Farms sausage does not actually come in a full-pound package any more. It's 14 ounces.
Turns out that even with the size difference, the Hillshire Farms special was still the better buy, but the realization that what I'd thought was a pound for who knows how long was not what it seemed left a bad taste in my mouth. I felt like I'd been suckered.
I swallowed my disappointment and got in line to check out. There, I realized I was about to have a compulsive chewer's nightmare: I was on my last stick of my favorite gum, Winterfresh. But I had a strangely difficult time finding the Wrigley's display. The reason? The package didn't look like I expected. Wrigley's now comes in a new "SlimPack" design. Instead of a single tall stack of sticks, the stack is divided into three smaller stacks and aligned side-to-side. The resulting package shape is completely different.
Grateful to find my favorite despite its new appearance, I didn't notice the other change until later. Seventeen sticks, you see, don't evenly divide into three stacks. But fifteen sticks do. Yep--the new package design disguises the fact that I am now getting less for my money. I give Wrigley's credit for its marketing creativity, but I resent the change. Not only have I two fewer sticks of gum in a pack, the new broader package doesn't fit into that handy inner pocket in my purse, either. Sigh.
So what's the big deal? After all, we're talking about two ounces of processed meat or two sticks of gum. This is not earthshattering volume. True, the downsizing of a single product doesn't make a heck of a lot of real difference to the consumer. After all, even though I'm now aware of their downsizing, I still bought the products in question and likely will continue to do so. And the few cents' inflation they represent is not enough to noticeably cramp my budget.
In my estimation, the bigger problem is consumer trust. Product downsizing is not illegal. Since both size and price are clearly marked, it can't exactly be called deceptive, either. In fact, in Wrigley's case, it can even be called clever marketing spin. But the practice leaves an unsavory impression when a consumer realizes the change. I, for one, would be more comfortable with a modest yet upfront increase in price than being left with the feeling I've been had by companies I've happily patronized for years.
I sell services, not products. Imagine what would happen if I tried to downsize my units instead of raising prices to reflect inflation: would I redefine "one hour of service" as fifty minutes? Would I add a separate processing fee to each hour I perform? Of course not. Inflation is a fact of economics. Consumers understand that per-hour pricing is not going to remain static decade to decade. When I realize I must raise my prices, then that's what I do, and my pricing menu reflects that upfront.
Maybe it's not pleasant, but at least it's transparent.
© 2008 by AnnaLisa Michalski