What Heinz Discovered

Rishi Rawat Blog Posts 1 Comment

Retailers (online and offline) really care about Price Elasticity. It determines their bottom line.

Price elasticity definition

The measure of the responsiveness of consumers to a change in a product’s cost. Definition source.

It follows that if the price of a product is increased overall units sold drop, and vice versa. But this is not always the case.

The Heinz story

How Heinz uses price elasticity.

Photo by Pedro Ribeiro on Unsplash.com.
What Heinz learned about price elasticity

Heinz discovered by increasing the size of ketchup bottles from 24oz to 36oz sales increased with no reduction in buying frequency. Turns out consumption of ketchup follows its own convention. Mothers buy ketchup for kids so when there’s less than 3/4th left they ask their kids to go slow and consumption rate falls.

With the 36oz bottle, 3/4th is still a lot. When consumption was viewed side by side it was discovered they got over at approximately the same time.  The replacement of 24oz with 36oz helped Heinz increase ketchup sales by 13%.

A little about us

Thank you for reading this Price Elasticity article. We are Frictionless Commerce and over the last 11 years, we’ve thought about just one thing: how do we get online shoppers to convert? We’re fascinated by buyer psychology. Once we’ve understood how your site visitor thinks we use our 9 point copywriting process to convince and convert them.

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