The Psychology of Small Packages

[P.J.]

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Sometimes small amounts of food could drive you to eat more.

Packaging is so influential that even a subtle hint seems to nudge people to stop eating. Researchers fed college students watching television Lay's Stax with a red chip placed at various intervals throughout the canister in a 2012 study. Some students got regular canisters without any red chips. Students given canisters with red chips ate less than half the amount than those without red chips. When questioned later they also more accurately described how much they ate. An "artificial barrier" helps eaters decide when to stop, says Andrew Geier, lead author of the study published in Health Psychology.

The urge to eat to the bottom of a bag appears to wane when a package is so large it is clearly not a single serving size, Dr. Geier says.

Read more here:
Overeating: The Psychology of Small Packages - WSJ.com

 

[sangom]

Sometimes small amounts of food could drive you to eat more.

Packaging is so influential that even a subtle hint seems to nudge people to stop eating. Researchers fed college students watching television Lay's Stax with a red chip placed at various intervals throughout the canister in a 2012 study. Some students got regular canisters without any red chips. Students given canisters with red chips ate less than half the amount than those without red chips. When questioned later they also more accurately described how much they ate. An "artificial barrier" helps eaters decide when to stop, says Andrew Geier, lead author of the study published in Health Psychology.

The urge to eat to the bottom of a bag appears to wane when a package is so large it is clearly not a single serving size, Dr. Geier says.

Read more here:
Overeating: The Psychology of Small Packages - WSJ.com

Dear Shri PJ,

Under Indian conditions, I think that the crores of our hungry and malnourished children will not at all bother about an occasional "red chip" etc., when even a packet of Lay's is beyond their dream; these kids will try to eat maximum and yes, there is another point I have observed, i.e., some people are so fond of some particular items like say banana chips, urad vadas, kArAvaDai, etc., that even when they are guests, they will eat up whatever is given to them and, depending on their familiarity with the host, they may suggest a second serving also.

Hence all these kinds of pseudo studies will have a very clear agenda. Here it would appear that Lays which has come under some adverse notice for causing obesity and gynecomastia (hanging, female-type breasts) in boys, has manipulated this so-called learned survey so that the company will get some USP for its red chip packs.

I would personally prefer that we avoid all such things which try to mislead people and may be relevant only for the upper crust of the Indian society.

 

[P.J.]

Here's an interesting business question: if roughly two-thirds of the world's population makes USD 1,500 or less per year, why try to sell them expensive, bulky goods and services originally designed for consumers who easily make twenty times as much in North America, Western Europe or Japan?

To the rescue come innovative micro-selling methods, aimed at new consumers in developing mega-economies like China, India, The Philippines, Mexico and Brazil. It's all about serving up your products, services and loans in affordable portions, sachets or sizes, so that consumers get to know and like your brand.


Meanwhile, you the manufacturer or service provider can still make a good profit from sheer overall volume (smaller sizes, but more buyers). Our sister-publication Springwise New Business Ideas has already been paying quite a bit of attention to these interesting initiatives: now it's up to TRENDWATCHING.COM to coin the overarching trend: SACHET MARKETING.



Consider the following examples highlighting the SACHET MARKETING trend:

• In Brazil, fast moving consumer goods giant Unilever sells Ala, a brand detergent created specifically to meet the needs of low-income consumers who want an affordable yet effective product for laundry that is often washed by hand in river water. In India, Unilever successfully markets Sunsil and Lux shampoo sachets sold in units of 2-4 dollar cents; Clinic All Clear anti-dandruff shampoo sachets at 2.5 rupees each; and 16 cent Rexona deodorant sticks. In Tanzania, Key soap is sold in small units for a few dollar cents.

Filipino telco Smart has turned its customers into salespeople: the Smart Buddy System allows cell phone customers to resell their unused credits, which not only eases the strain on cash flow, but earns them money as well! For each 1,000 pesos sold, the 'merchant' receives a 150 pesos commission. For more info, check out the Springwise item on the Smart Buddy system.

SACHET MARKETING

 

[sangom]

Here's an interesting business question: if roughly two-thirds of the world's population makes USD 1,500 or less per year, why try to sell them expensive, bulky goods and services originally designed for consumers who easily make twenty times as much in North America, Western Europe or Japan?

To the rescue come innovative micro-selling methods, aimed at new consumers in developing mega-economies like China, India, The Philippines, Mexico and Brazil. It's all about serving up your products, services and loans in affordable portions, sachets or sizes, so that consumers get to know and like your brand.


Meanwhile, you the manufacturer or service provider can still make a good profit from sheer overall volume (smaller sizes, but more buyers). Our sister-publication Springwise New Business Ideas has already been paying quite a bit of attention to these interesting initiatives: now it's up to TRENDWATCHING.COM to coin the overarching trend: SACHET MARKETING.



Consider the following examples highlighting the SACHET MARKETING trend:

• In Brazil, fast moving consumer goods giant Unilever sells Ala, a brand detergent created specifically to meet the needs of low-income consumers who want an affordable yet effective product for laundry that is often washed by hand in river water. In India, Unilever successfully markets Sunsil and Lux shampoo sachets sold in units of 2-4 dollar cents; Clinic All Clear anti-dandruff shampoo sachets at 2.5 rupees each; and 16 cent Rexona deodorant sticks. In Tanzania, Key soap is sold in small units for a few dollar cents.

Filipino telco Smart has turned its customers into salespeople: the Smart Buddy System allows cell phone customers to resell their unused credits, which not only eases the strain on cash flow, but earns them money as well! For each 1,000 pesos sold, the 'merchant' receives a 150 pesos commission. For more info, check out the Springwise item on the Smart Buddy system.

SACHET MARKETING

Dear PJ,

I think you are trying to justify the American manufacturing giants' efforts at selling their products, hook or by crook, to poor consumer strata in other countries, when a sizeable percentage of their own US markets are full of Chinese manufactures. It is even possible that all those micro-packaging or sachet marketing items originate in China with American brand names and all that. But then, how are these related to your earlier "red-chipped" Lays? I don't know.

But for this slave mentality about all kinds of "foreign" goods, countries like India could have had their own industries in a better position. If we as Indians cannot have some amount of national feeling, then will the Americans come to our rescue? Or, it may be that you have already considered yourself as a PIO in the US who has to necessarily sing paeans to the various MNCs. The only exception seems to be the Philippino; perhaps because the US defence personnel had been there for many decades and the Philippinos swallow US culture almost wholesale.

 

[P.J.]

Low Purchasing Power resulting in Purchase of Small Packets
India being a growing country, purchasing power capacity of Indian consumers is lower; the consumer goods come in small, affordable packages. Apart from the normal products packaged in flexible packaging, the use of flexibles in India includes some novel applications not usually seen in the developed world. Products like toothpaste, toothpowder, and fairness creams in laminated pouches are highly innovative and are not used elsewhere. Another typical example of such applications is tobacco and betel nut-base intoxicants and mouth fresheners catering to unique Indian taste.

Rural Marketing Pushing Demand for Sachets

India comprises of a big rural market and there has been growing focus on rural marketing, whereby manufacturers are introducing low-priced goods in smaller pack sizes. Low priced sachets have proved to be extremely popular in smaller towns and villages, where people do not prefer to buy larger packs due to financial constraints.

Mirambika || Meera Creation || A Nature Product

 

[P.J.]

The Psychology small packages is more relevant to even rural poor in India as is shown in the above studies.

 

[P.J.]

One key reason why sachet could work is that they are both more affordable (per package) and cheaper (per unit).
First, small package sizes translate in lower costs per purchase and less "capital" bound in the storage rooms of poor households. With households struggling to manage their cash flow on a daily basis, these factors could make sachets attractive for poor customers, allowing them to purchase quality products normally out of reach.


But there is a second factor: Sachets are actually cheaper on a per-unit (read: per-gram, or per-liter) basis as products sold in larger packs. A 2009 study by Ramendra Singh, Indian Institute of Management Ahmedabad, et al, (see below) finds shampoo in India to be up to 50 percent cheaper per ml when sold in sachets. The finding is most prominent for India, but seems to hold across countries in tendency: P&G Shampoo in both the Philippines and Vietnam is about 7 percent cheaper when sold in sachets, while only in Indonesia, sachets come at a hefty mark-up of 30 percent.

That sachets are cheaper than large packages on a unit-basis is actually counter-intuitive: Large packages should lead to cost savings. But Singh et al. cite technical and logistical innovations that led to cost savings in sachets. Products in temper-proof and standardized packages can be easily handled in the long supply chains reaching out into rural areas in developing countries. This allows companies to price them low, lower than larger packages, for end-consumers. The authors stress that the pervasiveness and success of sachet market in India may also be due to the "Nation of Retailers" ethos and the prevalence of small stores over large chains, a perfect breeding ground for a sachet revolution.

Customers could also prefer sachets because they are more convenient. Sachets are easier transport (if you don't have access to a car), easier to store (important when you're living in a small house) and don't get wasted if you want to use only small amounts over a longer period (which cash-strapped households might prefer).

They even reduce risks for poor households. New brands and new products can be tried out more safely compared to getting a big package. Exactly this "sampling" function has been one reason for innovating sachet distribution, before benefits for reaching the poor were talked about.


Overall, sachet marketing has been a success for companies. The lower price for sachets can explain why they dominate bottled sales in key product categories. When Sachets are considerably cheaper than full-size bottles, as in India, they tend to make up a significant proportion of sales. But taking the sales of shampoo reported by Singh et al., companies have been much more successful selling sachets to the rich (or middle-class) customers than to the poor. Singh et al. report that while product awareness does not differ between rural and urban areas, it's (relatively rich) urban customers that purchase four in five sachets.

Poor households are more reluctant. If they're not accustomed to shampoo and have access to reasonable alternatives (such as normal detergent), they don't seem to buy the product. And while giving consumers "choice" may be a development goal as such, this choice could very well include consumers opting to not purchase a product for which they do not see a need.

NextBillion.net | Small is Beautiful, Small is Cheap, But Do the Poor Care?