Sneaky but not illegal: An experimental study of how price increase and product content reduction affect attitudes towards brand and retailers and persuasive intent

Sammanfattning: In the past years, consumers may be confused as to why their household goods do not last as long as they have in the past. In almost all cases, this is due to a phenomenon called 'shrinkflation'; the practice of reducing the size or quantity of a product while keeping the same price. By utilizing the theories behind the persuasion knowledge model, this thesis investigates how such a tactic affects consumers' brand and retailer attitudes, compared to a total price increase tactic. A scenario experiment was conducted through an online self-completion survey that targeted Swedish Generation Y (ages 19-41). The participants were randomly divided into two experimental conditions where they were exposed to a scenario in which a package of brewed coffee from Zoégas either increased in total price or reduced in content. Findings indicate no significant differences between consumers with different levels of 'pricing tactic persuasion knowledge' regarding their brand and retailer attitude. However, content reductions were found to have greater persuasive intent than total price increases and yielded a higher probability of consumers inferring a 'profit margin increase motive'. Furthermore, content reductions had a negative impact on both brand and retailer attitudes. Based on these findings, implications, and suggestions for future research are discussed.