Advertising Age reports that the manufacturer trend toward reducing package size without lowering prices may shortly undergo a reversal. It is anticipated the lower commodity costs will allow them to either increase package sizes and perhaps advertise their products as offering additional product for free.
It is not entirely clear whether these changes will be permanent or simply promotional, and the determination may be made by 1) how consumers react, 2) how commodity costs continue to go up or down, and 3) what the competition does.
It is not entirely clear whether these changes will be permanent or simply promotional, and the determination may be made by 1) how consumers react, 2) how commodity costs continue to go up or down, and 3) what the competition does.
- KC's View:
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There apparently are at least a couple of cases where consumers have not reacted well to all these shifts, noticing the manufacturers are claiming credit for offering free product as a promotion when all they have done is return package sizes to previous levels. And manufacturers have to be careful about the appearance that they are being less that forthright with shoppers, who don't always appreciate being manipulated.
But this story continues to prove that the pundits were wrong when they claimed just a year or two ago that prices were going up and never would come down again. First of all, you never say never. And second, you should never underestimate the power of consumer demand…and consumers were never going to stand for increased prices during a recession.
