4 min read.Updated: 16 May 2022, 10:21 PM ISTAndy Mukherjee
Pack resizing in 2021 by marketers like HUL should’ve alerted RBI
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If it wanted to get ahead of the inflation challenge, India’s central bank should have paid more attention to Surf Excel. The price of this detergent went up by 20% in January. While that’s hardly news when most daily-use items are getting dearer, the interesting part was the retail price before the change: ₹10 for a bar. Such tiny bars of detergent are aimed at consumers who are often unable to spend a rupee more without having to cut back on something else. To prevent these customers from downgrading to cheaper products, Hindustan Unilever (HUL) relies on “magic price points"—such as ₹5 or ₹10—that help buyers stay within tight budgets. “Almost 30% of our business comes from packs that operate at magic price points," Ritesh Tiwari, chief financial officer of HUL, said recently. For these packs, weight cuts are common. “As a result, even the same number of units sold leads to volume decline."