FMCG companies coming up with full fledge products (with all SKUs) is not always the correct marketing strategy for infiltrating into the marketplace. It is, therefore very important to distinguish what is going on nowadays in order to engage consumers with the merchandise. Most of the companies are straining to get upward with the strategy, agreeing to its targeted developed or developing areas. Such companies always run with the disposable income of targeted consumers and launch strategies accordingly.
On first picture the idea of providing a smaller variation of a product generally goes against the idea of value for money, and the concept of economic systems of scale would support this. It is broadly assumed that larger variants of products offer better value as fixed prices are set off against a bigger mass of merchandise. But 80% of consumers globally regard being customized to their needs as an attribute which adds value to a product. Purchasing a small size variation may actually turn out cheaper than purchasing a regular sized pack and throwing half of it go to waste away. One advantage of smaller variants for the consumer is that they dilute the peril involved in experimenting with a raw product and therefore hopefully facilitating the shift to your brand in the long term.
This sort of line extension can also produce products more accessible to those with depleted levels of disposable income such as consumers from newly-emerging economic systems. These consumers may see some products prohibitively expensive despite having the desire to apply them. Fully 58% of consumers in developing markets agree that “it is better to buy well-known brands because you can bank on their quality,” compared to 28% in developed markets. Consumers may be more willing to get a weekly purchase of a premium skincare brand, for model, than to redeem up to buy a regular-sized bottle at the remainder of the month. This is also especially useful for products that may not be used up at once, such as over-the-counter medications, which can sit in the cupboard for months after initial employment.
Many FMCG companies have actually named this as one of its strategies for the struggling European markets where many consumers have faced challenging economic conditions for more or less time. Small pack size products can also assist people for a small treat which is able to suitably satisfy their cravings. Globally, two out of five consumers agree that it’s important to indulge or pamper them on a steady base. Smaller variants may present an opportunity to alleviate consumer consciences regarding these guilty pleasures which may otherwise be considered unhealthy or not strictly a necessary expense.
As we witness the rise of the middle class in Developing economies and single-person households in Developed economies, and with consumers looking to tighten their belts both literally and figuratively, product smallness/efficiency will be an interesting area of opportunity for consumer products going forward.