Charging More For Less: Crazy But Profitable
Another post looked at hidden price increase – the tricky ways manufacturers can effectively raise prices without increasing the price you see on the tag through stealth tactics like de-weighting and de-sheeting.
Part of that approach often involves misdirection – labelling the new packaging as "high-efficiency and eco-friendly" or "convenience size". The goal is to distract you from the fact you are paying the same and getting less.
Sometimes it becomes more aggressive – instead of charging the same money for less product the seller is so confident in their misdirection that they charge more.
The do this by attempting to change the way you value their product. Instead of valuing quantity (of which you are getting less) they want you to value something else.
A classic example is calories. Generally speaking when you are buying food the value is in the calories. If you wanted fewer calories you would, simply, buy fewer calories.
That can change if the seller tries to establish fewer calories as the value rather than quantity. Here is one example:
These cans of soda stress that they contain only 90 calories. They accomplish this in the simplest possible way – these 220ml cans are much smaller (almost one third smaller) than the standard 355ml cans. With that reduction in quantity comes a completely unsurprising reduction in calories.
The same reduction could of course be accomplished in other ways, such as buying a full size can and dumping a third of it out. So, since you are getting less surely you pay less too...
But no. The larger can are actually cheaper. Much cheaper in fact. Six of the small cans cost $3.99, while TWELVE of the large cans cost just $3.50. When you factor in the size difference of the cans the contents of the small can cost almost three times as much as the larger cans.
It's great misdirection but absolutely terrible value. If you are serious about consuming less calories it would cost you more than 60% less to buy the large cans and pour a third out before taking the first sip.