Who Says Size Doesn't Matter?

Don't worry, it's not what you think- we're not writing about those "male enhancement" prod­ucts you see advertised on TV.

We are going to talk about size; specifically, the size of some prod­ucts you buy at the supermarket.

In case you haven't noticed, there has been a steady and stealthy trend over the last few years to reduce the size or contents of standard-sized products... while maintaining the original prices.

When is a Half Gallon Not a Half Gallon?

Sounds like a trick question? It really shouldn't, unless you use the "new math" in packaging products.

Dairy products come in standard sizes, right? Gallon, quart, pint, etc. And these sizes are clearly defined in terms of liquid volume: a gallon is 128 ounces; a quart is 32 ounces; and a pint is 16 ounces.

By that math, then, a half-gallon would weigh in at exactly 64 ounces.

Which is why it caught my eye when I went to pick up a container of my favorite Tropicana Pure Pre­mium Grovestand orange juice.

I went to the dairy case, pulled out what appeared to be a half-gallon container, and then did a double take as I saw what was writ­ten on the bottom of the container:59 FL OZ (1.8 QT) 1.75L

You'll see this on the container on the right. While this might not seem like a big deal, you can make some interesting observations.

The first, and most obvious is the reduction in the amount of juice contained in the two containers: 64 ounces on the left, and 59 ounces on the right; a reduction in the total content of nearly eight percent.

The second observation relates not to what's different between the two containers, but rather to what's the same; namely, the size of the container itself.

That's right, the container isn't actually any smaller, they just don't fill it up completely any more, so it still looks like you're getting the same amount.

It's not just orange juice that's experiencing this "shrinkage phe­nomenon." Look at Breyer's Ice Cream in the grocery store. The containers are now 1.5 quarts (75 percent of a half-gallon) or 1.75 quarts (about 87 percent of a half-gallon).

To make it difficult to easily spot the smaller size, they've kept the same size lid as in the original 64-ounce container, but reduced the height of the container since the reduced volume would be more noticeable with the ice cream than it would be with the orange juice, which is poured rather than "scooped" out.

So What Else is Shrinking?

If you start paying attention to things like this, you'll start to notice this trend creeping into other prod­ucts.

A bag of regular potatoes used to be ten pounds; now the "standard" size is eight pounds, a 20 percent reduction in size, with no corre­sponding reduction in price.

Same thing with sugar, which was traditionally packaged in a five-pound bag, but now comes with only four-pounds.

So you don't think this article is just some kind of "rant" or outspo­ken social commentary, there are two important business and mar­keting principles at work here.

Give the "Reason Why"

Anytime you make changes to what you're providing-even if you're adding instead of subtract­ing, it's always important to explain why you're doing it.

In the case of the orange juice, the official company response to the smaller size was this:

"Reducing our 64-ounce carton to a 59-ounce carton wasn't a deci­sion we took lightly. As you prob­ably have heard, the Florida citrus industry has suffered the most devastating winter freeze with one of the smallest orange crops in 20 years. When the supply of oranges goes down the price goes up, which impacts our costs.

Instead of raising prices, we chose to slightly reduce the amount of juice and maintain the price.

Our consumer research shows that most shoppers, when given a choice between a price increase or slightly less contents, prefer to hold the line on prices."

I guess that makes sense-at least it's an attempt to explain their actions. Of course, I'll be absolutely shocked that if the crop yield is good next year, they will go back to the full 64-ounce size or drop prices on the smaller package.

My guess is that they will simply pocket the additional profits; but we'll just have to stay tuned to see how this plays out.

Three Ways to Increase Revenue

The second principle at work here, albeit subtly, goes back to something we've addressed here before: the fact that there are only three ways to increase revenue:

1. Get more customers

2. Get your customers to buy more

3. Get them to buy more frequently

Assuming a constant rate of consumption of orange juice or ice cream or sugar or potatoes, reduc­ing the size of the unit sold will increase the frequency with which the product is purchased.

And if the price is held constant, and the product is purchased more frequently, simple math dictates that the revenue will increase.

Who can say for certain if this was a deliberate strategy or just a happy outcome? But one thing is for sure: these two strategies are both powerful and effective, and you should find a way to incorpo­rate them into your own high-level marketing and business strategies.