Bigger packaging, bigger consumption

Developing an optimal portfolio of package sizes is of key importance for Brand Managers, as it is the basis for having a competitive portfolio.

Taking the cost factor out of the equation, packaging-size related decisions should consider following criteria:

-          sizes offered by competitors

-          constraints from our supply and logistics operators

-          constraints from retailers/shelf space

-          size preferences from consumers and consumption habits/constraints

-          variant roles assigned to each size (recruit, refill, stock, on-the-go, etc)

-          packaging appeal

Once this is done marketers should also realize that size per-se can further influence consumer behaviour after the product has been purchased. Sizes can help either accelerate or decelerate usage.

Why is that? It is simply because larger packages have lower unit costs, and therefore are perceived by consumers as less expensive to use than smaller packages. However there is a limit to how much Nesquik you can put on a glass of milk and all products have a “saturation point”. In that sense, Brand Managers will have to evaluate the size at which a package no longer influences usage volume. Note that consumers are not stupid and also realize that bigger packages imply bigger waste.

Furthermore, an additional effect of bigger packages can come from the presence of the product on the household inventory. I have it, therefore I consume it.

Interesting is also to think about size as a promotional tool. Giving free product (+20% volume GRATIS), might be a much more powerful promotion than doing a 20% price-off promotion. A 2x1 promotion is for example a very successful way to not only stimulate purchase, but also greater usage frequency.

Posted by Ignacio Molins