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What Heinz Discovered

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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 the 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%.

More Buyer Psychology Stories

If you liked this price elasticity story you are bound to like the next nine too: My Favorite Buyer Psychology Stories.

A Little About Us

We are a group of marketers who don’t care about best practices. Our interest is in discovering things other marketers don’t know so we can give ourselves and our clients an unfair advantage.

Over the last 14 years we’ve run 100s of A/B tests and learned a lot of fascinating things about buyer psychology. But the most important thing we’ve learned is this: you need to ignore 84% of your site visitors and triple down on Healthy Skeptics.

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