How Effective Are Value Packages?

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Value Pack [noun]: package containing multiple items that is less expensive than the same number of the items purchased singly — wordreference.com

During periods of low consumer spending, one common approach taken by many FMCGs is to create ‘Value Packages’ — basically a slightly bigger offering of the same product for the same price. The thinking behind this is that consumers will appreciate getting more for less. This approach rests on the assumption that consumers make rational decisions when purchasing goods. In reality, this is almost always not the case.

A better approach in a recession, instead, would be to focus on readily affordable offerings i.e. the smaller SKUs as opposed to introducing a bigger package at the same price. The reason is because majority of consumers in a depressed economy have less disposable income and are not inclined to tie down cash in ‘Value for Money’ offerings to the detriment of other daily expenses. Daily survival takes precedence in situations like this.

‘Value for Money’ offerings will only readily appeal to consumers with higher disposable income, who are likely to make bulk purchases. But for the average consumers who make up the bulk of the FMCG consumer base, I don’t think it’s an investment in the right direction.

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