{"title":"Consumers' preference for downsizing over package price increases","authors":"In Kyung Kim","doi":"10.1111/jems.12548","DOIUrl":null,"url":null,"abstract":"<p>In this paper, I study how and why consumers react differently to package downsizing and package price increases that result in the same degree of unit price increases. Utilizing differential responses of South Korean milk manufacturers to the production cost rise in 2018, I first show that consumers strongly prefer downsizing to package price increases, and this tendency does not diminish over time. Then, I develop a theoretical model whose prediction is consistent with the empirical findings, providing a simple but novel explanation of why fully informed consumers would be less sensitive to downsizing than package price increases.</p>","PeriodicalId":47931,"journal":{"name":"Journal of Economics & Management Strategy","volume":null,"pages":null},"PeriodicalIF":1.2000,"publicationDate":"2023-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Economics & Management Strategy","FirstCategoryId":"91","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/jems.12548","RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
In this paper, I study how and why consumers react differently to package downsizing and package price increases that result in the same degree of unit price increases. Utilizing differential responses of South Korean milk manufacturers to the production cost rise in 2018, I first show that consumers strongly prefer downsizing to package price increases, and this tendency does not diminish over time. Then, I develop a theoretical model whose prediction is consistent with the empirical findings, providing a simple but novel explanation of why fully informed consumers would be less sensitive to downsizing than package price increases.