Earn money by answering our surveys

Register now!
Marketing, customer satisfaction and loyalty
Satisfied customers will follow you everywhere

Tropicana: guess what they did to increase profits by 15%

Earn up to 50€ by participating in one of our paid market research.

Register now!

My attention was drawn by a fellow reader on a recent change he noticed in the Topicana product range. While in the supermarket he realized that one particular product had changed slightly.

A product range with some profit boosters

The Tropicana product range can be roughly divide into 3 categories : classic, exotic and specialties. They recently added also limited editions (priced roughly at the same level as their specialities).

The most expensive products are the “specialties” but they include also some of their better known product such as Sanguinello. This product seems to satisfy consumers and foster particularly their loyalty. Interestingly enough, this product was temporarily absent of the shelves in 2005 (link in French) (from January until March 2005) and again in 2009 when Tropicana was unable to source blood oranges in the required quality and volumes.

You must hold a very strong position on the market to allow such a move. This is highly dangerous, yet a tangible evidence of a brand’s dedication to quality.

A premium positioning in the range that required a slight re-pricing

The specialty products are thus the top-tier product in the Tropicana product range. The financial crisis most probably affected consumers’ behaviors and my guess is that a switch was operated from specialty products to the more affordable “classic” range. Customers tend indeed to compare prices in one category and to arbitrate; although prices per unit of volume of weight are mandatory, the most basic choice still operates at the level of the price tag.

What Tropicana did gets barely noticed. They decreased the volume of the bottle (from 1 liter to 0.85) to keep the price to an acceptable level. This 15% decrease in volume (without changing the price) corresponds therefore to a 15% increase in profits for them.

Tags: ,

Author: Pierre-Nicolas Schwab

Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)

Share This Post On

Submit a Comment

Your email address will not be published. Required fields are marked *