Part C1 · Gains, Losses and Reference Points

Reference Prices and Shrinkflation

The last price paid becomes the customer's reference point. Shrinking pack size quietly avoids the price shock but damages trust when noticed.

Reference Prices and Shrinkflation · Illustrated by Hendra Saputra with AI assistanceSelect the illustration to explore it at a larger size.

The idea

Customers notice quantity changes less than price changes, which makes shrinkflation tempting. When they do notice, they see it as hidden and unfair, and trust falls. Raising the price with visible added value, announced in advance, moves the reference point without the sense of being tricked.

Use it thoughtfully

  • Announce price and size changes in advance.
  • Show the added value next to any rise.
  • Never shrink your flagship pack quietly.

An example

ILLUSTRATIVE EXAMPLE: Instead of cutting 10 GB to 9 GB silently, an operator announces a move to Rp 55,000 for 12 GB a month ahead.

A question to try

If customers compared your packs today with a year ago, would any change feel hidden?

A useful framework is a starting point, not a guarantee. Effects vary with the audience, product and situation. Use truthful evidence, respect customer choice, and test the result.

Connect the ideas

Illustration

Use + and − to zoom, scroll to explore, or Escape to close. Please seek permission before reusing an illustration.