The VIth Sense - Tropicana: Stupid Smart
A January freeze in Florida resulted in an increase in orange prices. Instead of raising the price of the most common sizes of its boxed juice, Tropicana has decreased the size of the packaging- and therefore the volume therein. An interesting and fairly common strategy. But pretty risky too.
Wouldn't it be more transparent (read: honest) to leave the size the same and go ahead and raise the price? Revised packaging (which Tropicana already goofed on once this year and is explained below) is expensive when you consider graphics, dies, production, factory modifications, etc. Raising the price would mean that you could lower it (or at least coupon it) when the orange inventory resumed to normal levels. Instead, Tropicana opted for the reduced packaging and then announced the change to the public through news releases. Next, they began aggressively promoting an affinity program that allows consumers to gain discounts on other products if they buy multiple packages of Tropicana. Not a bad cover for a price increase, err volume decrease.
Note - Earlier this year, Tropicana changed the graphics on their packaging. Gone was the orange with the straw in it (can't get fresher than that), to be replaced with a generic design which consumers found ugly and easily confused it with generic brands. Tropicana received so many negative comments (mostly through social media) that it decided to revert to the old packaging.