THE EFFECTS OF SHRINKFLATION ON BRAND REPUTATION: THE CASE OF DAIRY PRODUCTS IN ROMANIA

Claudiu-Cătălin Munteanu () and Alexandru-Narcis Bozgă ()
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Claudiu-Cătălin Munteanu: Institute of Agricultural Economics, Romanian Academy, Bucharest
Alexandru-Narcis Bozgă: Faculty of Management, Economic Engineering in Agriculture and Rural Development, University of Agronomic Sciences and Veterinary Medicine of Bucharest, Romania;

Agricultural Economics and Rural Development, 2022, vol. 19, issue 2, 281-292

Abstract: Shrinkflation is a form of package downsizing that allows companies to maintain operating margins and increase sales volumes while maintaining profitability. It is widely used in practice based on the premise that consumers are deterred more by higher prices than by smaller packaging. This study determines the effects of shrinkflation on brand reputation by analyzing brand perception and consumer response to three shrinkflation-related scenarios for dairy products. Results show that while shrinkflation has little to no influence on brand perception, it significantly alters consumer response, especially in the scenario consisting of package downsizing without any price modification. Therefore, shrinkflation alters brand reputation by increasing consumers’ degree of skepticism towards the brand and challenging brand superiority claims. As consumers become increasingly frustrated by package downsizing, brand reputation tends to suffer even in shrinkflation scenarios that also include price modifications

Keywords: shrinkflation; package downsizing; brand reputation; brand perception, consumer response. (search for similar items in EconPapers)
JEL-codes: M31 Q13 (search for similar items in EconPapers)
Date: 2022
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