M370 Mini-case Shrinkflation

M370 Mini-case: "Shrinkflation" Takes Hold in Product Sizing The small things matter. Small in this case meaning the quantity in a package. In case you haven't noticed lately, prices are going up and contents are going down. If you're not sure about this, consider the new sizes of common household products such as toothpaste and toilet paper. Example: A Crest toothpaste once contained 4.1 ounces of teeth-whitening product, but now contains 3.8 ounces. Gatorade was 32-ounces, but not it is down to 28 ounces. And (in case you are counting sheets) a roll of Cottonelle toilet paper has shrunk to 312 sheets, compared to its former count of 340 sheets. Meal portions at restaurants have also been impacted. At Subway restaurants, the chicken wraps and sandwiches have less meat now. Domino's Pizza reduced the order size of boneless wings to 8 pieces from the usual 10 pieces. Burger King is also downsizing its nugget meals from 10 to 8 pieces. What is going on? At first glance none of this seems too alarming, but this movement is called "shrinkflation" and tends to not retreat once implemented. Shrinkflation is when manufacturers cut down on the product size or volume in a package, rather than raising the price on the customary size. This happens during times of increasing raw materials and supply chain cost increases. Previous research has found that consumers, once aware that companies are reducing product sizes or portions, will avoid certain brands and tell their social circles to do so as well. However, shrinkflation has been an effective way to
increase profits because many shoppers are far less sensitive to changes in packaging than they are to changes in price, further research indicates. Still, with inflation as high as it is, and more consumers paying closer attention, attempts by brands to squeeze more profit out of each sale by changing package sizes may not go unnoticed. It's not illegal, but how does it affect consumers? Does the practice seem a little sneaky? And, once the new sizes and prices have been accepted, new standards are in place for consumers and their wallets. Discussion Questions: 1. What have you observed in your purchases? Are the sizes or prices the same as they have been historically? Which do you pay more attention to, prices or quantity? 2. Watch "Shrinkflation": https://youtu.be/q13_06F4_HI What are some of the reasons why manufacturers are making these changes? 3. How is shrinkflation accounted for in pricing? 4. Do marketers have a responsibility to announce to consumers that are changing (downsizing) their product while maintaining prices?
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