– Okay, Maggi is Rs. 14 now, but that’s not bad either is it?
So, I used to enjoy snacking on Kurkure in school. For just 10 bucks, I could munch on the fantastic Indian snack through the entire length of my favorite cartoon or lunch break. Today, 15 years and many life lessons later, I still enjoy the flavourful Indian chips while writing case studies and copies in a digital marketing company. And the best part is, I still don’t have to burn a hole in my pocket. It costs the same!
The prices of popular snack brands such as Lays, Parle-G, and Kurkure have remained unchanged and the companies behind these products – Nestle and Parle, have found ways to adapt to market fluctuations and inflation.
One of these strategies has been to reduce the quantity of product in each package while maintaining the same price. But there’s more to it. Let’s delve deeper.
The Mystery Behind Numbers 1, 5 & 10!
The numbers 1, 5, and 10 are sacred selling digits that influence buyers on a psychological level. These numbers do their magic on the buyers who live in the urban and metro regions, as well as those who live in the rural areas. Even people with low incomes can afford these prices.
These FMCG companies don’t want to lose the magic numbers at any cost as that may adversely affect their sales. In addition, these selling prices have become a memory point for many customers as well as store owners.
But, are these price points unprofitable?
No. These price points are profitable for FMCG companies.
It’s common knowledge that the quantities of these products are reducing. Parle-G biscuit is one of the best examples that I could give as the majority of us know how much we relish the combination of Chai & Parle-G.
Parle-G started with a portion of 100gm and then a few years later, they reduced the quantity to 95 to 88gm. As of now, it weighs 55gm. Yet, the price remains the same at 5 rupees.
Maggi is another example that doesn’t just reduce the quantity from 100gm to 70gm for a basic packet but also increases the pricing by 2 rupees. Nevertheless, price rising did not affect the customers in the metro region as well as in the rural region. Maggi is listed as “comfort food” or “replacement of meal” in the psychology of Indian consumers.
But how have FMCG companies managed to maintain similar packaging sizes despite reducing the quantity of the product inside the package?
The answer is in the Air!
FMCG companies have many cards up their sleeves, and one of them is air. To compensate for the reduction in quantity, they fill the package with nitrogen gas. One industry research by Indian Centre for Plastic in the Environment revealed that chip packets have more than 40% nitrogen fill.
As long as consumers get the same impression of a product, they will spend their money. That’s the mystery behind why Parle G, Kurkure, and Lays are still selling their chips and biscuits at the same price with less quantity without losing their appeal.