January 22

[Nugget #17] Vice products: Pay more for less

Imagine you are selling delicious products such as potato chips. What would be the pack size you are offering? Small packs with 50 grams or larger packs with 200 grams each?

Now – imagine yourself in the grocer’s aisle where these tempting treats wait for you. Which pack size would you pick? The larger one or the smaller one?

How would your choice change if you had stood in front of your floor-to-ceiling mirror at home after you watched a documentary about obesity before you go shopping for groceries?

Wertenbroch (1998) found that people buy smaller pack sizes of tempting (vice) products. People are aware of these temptations and their lack of self-control. They minimize the risk of giving too much in by buying smaller pack sizes. Customers are even willing to pay more for smaller pack sizes and forgo quantity discounts just to “buy” a bit more self-control. Technically, price elasticity is lower for vice products (e.g. regular potato chips) compared to virtue counterparts (e.g. fat-reduced/light potato chips).

This is like Ulysses who made his crew tie him to the mast of his ship to resist the sirens.

The difference between buying smaller packs and binding to a mast is – the mast worked.

Do Vale et al. (2008) confirmed that people choose smaller pack sizes of potato chips to better handle self-regulatory concerns about eating control.

The researchers discovered that small pack sizes fly under the radar.

In an experiment self-control issues were made salient to participants by having them answering questions about their satisfaction with their body shape and having them measure their weight, hips and waist while standing on scales in front of a large mirror.

In an unrelated task a bowl of potato chips were exposed to these participants: one group sat next to two bags of 200 grams and another group sat next to nine bags of 45 grams each. If we expect that smaller pack sizes are effective in controlling over-eating… it did not work out, unfortunately. Participants in the “smaller pack size” situation were much more likely to open a bag than in the big pack scenario (59% vs. 26%) and to eat much more (46 grams vs. 24 grams).

Interesting research – what does it mean for you as a retailer and for you as a customer?

Lesson learned: Retailers should raise prices for smaller pack sizes of vice products. They can be sure these products will be bought… and will be bought again soon.

And as a customer, if you want to lose weight, buy bigger packs of potato chips 😉

References
Coelho do Vale, R., Pieters, R., & Zeelenberg, M. (2008). Flying Under the Radar: Perverse Package Size Effects on Consumption Self-Regulation. Journal of Consumer Research, 35(3), 380-390.
Wertenbroch, K. (1998). Consumption Self-Control by Rationing Purchase Quantities of Virtue and Vice. Marketing Science, 17(4), 317-337.


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