A few years back, several journalists began reporting about a new trend in product packaging: offering less product for the same price. One of these journalists, Michael Brush, dubbed PepsiCo’s subtle repackaging as, “The incredible shrinking Doritos bag.” Most companies cited rising costs as the reason for reducing sizes, but when the result ends up being higher profits and larger market share, those motives could rightfully be challenged. According to Brush and Harvard Business School Professor John Gourville, this strategy works because consumers don’t react to a change in quantity like they do to a change in price. Unfortunately for insurance consumers, this trend is finding its way into the insurance industry.
