What Determines Consumer Value?

Is it ethically OK for a manufacturer to reduce the amount of product in a package, but to keep charging the same for it?

Here’s an interesting example. The image shown here shows three varieties of Kraft Peanut Butter — Smooth, Extra Creamy, and Whipped. Notice that all three varieties are in jars of the same size, and all three cost the same. The ingredients are also virtually the same. But notice also that the one on the right — the Whipped peanut butter — includes one special ingredient not listed on the label. That ingredient also happens to be one that is free to the manufacturer, and that takes up a lot of space in the jar. That ingredient is air.

Yes, whipping peanut butter (like whipping cream or anything other liquid or paste) adds air to it. It fluffs it up. So if you look closely you’ll see that the label on the jar of Smooth peanut butter indicates that its contents weigh 1 kilogram (1000 grams). But the label on the jar of Whipped peanut butter indicates that its contents weigh just three quarters of a kilo, or 750 grams. The result is that when you buy a jar of whipped peanut butter, you’re getting 25% less peanut butter, or a jar that is effectively 1/4 full of air.

From a manufacturer’s point of view, this is wonderful. Being able to charge just as much while reducing the amount, and cost, of ingredients by a quarter is something of a coup.

Is it fair to the consumer? Or is the consumer being ripped off, getting less peanut butter for the same price? Is the consumer getting less value?

Well, no, I don’t think the consumer is being ripped off, though I suspect some will disagree with me. The 750g jar of Whipped peanut butter contains no less value than the 1000g jar of Smooth peanut butter precisely because there’s nothing to say that 750g of the one is less valuable than 1000g of the other. They’re different products, despite having the same ingredients. The value of a thing is absolutely not determined by its ingredients; all that its ingredients (or rather their cost) determines is the lowest level at which the product could be sold without the seller suffering a loss. A thing’s ingredients no more determine its value than does the amount of labour that went into it.

Or rather, no one can say that 750g of one thing is worth less than 1000g of the other, other than the customer. What matters is how the customer values those two things. If the customer finds 750g of Whipped PB to be as useful to them as 1000g of Creamy, then charging the same price seems perfectly fair. Consumers who disagree are naturally free to object — that is, to refuse to make a purchase. But that, I’m afraid, would be akin to cutting off their noses to spite their faces.

4 comments so far

  1. Lauren Benoit on

    This isn’t ethics, this is charging what the market will bear. If people don’t find this product appealing, they won’t buy it. Your final comment makes no sense. Why is deciding not to buy an overpriced product cutting off your nose to spite your face? Sounds like you have a vested interest in persuading people that they can’t evaluate a product based on obvious standards like quantity, quality, and price.

    • Chris MacDonald on

      Lauren:

      I’m not sure your accusatory tone does much to advance the conversation, here. And besides, what “vested interest” could a philosophy professor possibly have in anyone’s peanut-butter purchase decisions?

      But since doing so is easy, I’ll explain the point that you said makes no sense. I said that if you value 2 products equally, and yet refuse to pay the same price for both, then you’re cutting off your nose to spite your face. And that is precisely what you would be doing: doing something that’s not in your own best interests (judging those according to your own values) simply to make a point. In other words, you’d be making a bad choice (again, bad by your own criteria).

  2. Deirdre Mars on

    I don’t know if I’m clarifying your point or getting to it via another method if I point out that to a person who prefers lighter, airier peanut butter, it may be worth it to pay more for the same ingredient’s-worth of peanut butter.

    Separately, it’s worth noting that the ingredients aren’t the only cost to the manufacturer. Adding the step of whipping costs time and energy, which presumably brings the price back up closer to the price of the other two jars.

    I recently had someone point out to me with glee her discovery that a company selling same-sized cans of light, medium and dark roast coffees had less weight in the dark roast can. At the time I figured it was the additional time and energy required to roast the beans. Later I realized it’s also because the longer a bean roasts, the larger it gets–they literally fluff up! But since you measure out the resulting product into your coffee maker by volume, not weight, you aren’t getting less value.

    A better example for this thought-piece might actually be makers of tampons and feminine pads, who have made a practice through the years of charging more for the same products without adding any value for the increased price.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 1,601 other followers

%d bloggers like this: