INSIDE THE TRICKS OF

CONSUMER SPENDING

Prepared by Kristen Busby

BUSI 562: Consumer Behavior Final Project

April 20, 2014    

I  chose  to  research  consumer  spending  tricks  and  patterns  because  of  my  

interest  in  shopping  patterns  and  the  way  that  stores  present  sales  and  discounts  to  

customers.    Taking  a  step  back,  I  decided  to  focus  on  some  of  the  tricks  that  come  

along  with  consumer  spending.    My  research  can  be  broken  up  into  three  main  areas  

where  consumers  are  influenced  psychologically  –  sizing,  pricing,  and  store  layout.    

Not  only  did  my  research  appeal  to  my  personal  interests,  but  it  also  hit  on  several  

major  consumer  behavior  trends  that  we  have  not  covered  in  detail  over  the  course  

of  this  semester.  

 

Sizing  

  Whether  we  like  it  or  not,  the  United  States  is  truly  turning  into  a  “supersize”  

nation.    In  1955,  McDonald’s  offered  only  a  7-­‐ounce  fountain  drink.    By  1994,  they  

were  offering  several  sizes,  one  of  which  was  6x  the  original  from  1955.    In  2011,  

KFC  introduced  a  drink  called  the  “Mega  Jug”  which  was  so  big  that  it  had  a  handle  

for  carrying.    For  every  Mega  Jug  purchased,  KFC  promised  it  would  donate  $1  to  the  

Juvenile  Diabetes  Research  Foundation.    As  you  might  expect,  this  move  by  KFC  

sparked  much  controversy!    Today,  some  gas  stations  sell  fountain  drinks  as  large  as  

100  and  128  ounces  (as  shown  in  Appendix  A),  which  is  well  above  the  amount  of  

soda  the  human  should  even  be  drinking  in  a  week.  

  A  study  done  on  Tim  Horton’s  coffee  shop  reinforced  findings  that  drink  sizes  

are  increasing  drastically  over  the  years.    Tim  Horton’s,  a  chain  found  primarily  in  

Canada  and  Northeastern  states,  has  followed  the  trend  of  other  fast  food  

restaurants  in  pushing  larger  portions.    Specifically,  they  have  made  their  20  oz.  

extra  large  into  the  large  and  added  a  new  24  oz.  extra  large.    This  led  to  a  domino  

effect  that  made  the  previous  small  into  the  new  extra  small  (Appendix  B).    This  

example  highlights  how  arbitrary  the  sizing  of  consumer  goods  is  becoming.    

Businesses  are  exploiting  the  psychology  behind  sizing  in  order  to  nudge  consumer  

behavior.    Specifically,  renaming  a  cup  size  is  a  way  to  trick  consumers  into  buying  

more  coffee.    Although  the  extra  large  only  provides  19  cents  more  in  revenue  for  

Tim  Horton’s,  this  adds  up  with  each  cup  of  coffee  sold.  

  On  the  other  hand,  many  companies  are  downsizing  at  the  expense  of  the  

customer.    For  example,  a  510-­‐gram  package  of  OREO’s  has  now  been  decreased  to  

470  grams.    In  more  tangible  terms,  this  is  four  fewer  cookies  in  your  package  of  

Double  Stuf  OREOs!    In  2010,  Tropicana  reduced  their  orange  juice  cartons  by  5  

ounces.    Consumers  often  do  not  realize  these  changes  because  decisions  on  these  

routine  purchases  are  made  on  autopilot.  

 

Pricing      

  After  looking  at  sizing,  I  began  to  research  some  of  the  patterns  and  tricks  

involving  pricing.    One  concept  involving  the  psychology  of  consumer  spending  in  

relation  to  pricing  can  be  illustrated  with  an  example  about  Starbucks:  

“Imagine  yourself  walking  into  Starbucks  for  your  daily  Frappuccino.    You  see  

two  deals  –  one  for  “33%  extra  coffee”  and  one  for  “33%  off  the  regular  price”.    

Which  would  you  choose?”  

Many  people  think  that  these  two  offers  mean  the  same  thing.    However,  a  33%  

discount  is  actually  the  same  as  a  50%  increase  in  quantity.    Therefore,  consumers  

should  opt  for  the  33%  discount.    This  illustrates  another  consumer  spending  

concept  –  getting  something  extra  “for  free”  feels  better  than  getting  the  same  for  

less.      

  I’ve  personally  seen  the  validity  of  this  statement  when  shopping  at  Harris  

Teeter  for  groceries.    If  you  are  not  familiar  with  Harris  Teeter,  they  offer  many  buy  

one  get  one  free  specials  each  week  on  various  items  in  the  store  (Appendix  C).    

Many  customers  do  not  realize  that  rather  than  taking  advantage  of  the  free  second  

item,  they  may  simply  purchase  one  at  a  50%  discount.    When  I  am  shopping  at  HT,  I  

find  it  hard  to  pass  up  the  second  box  of  Cheez-­‐It’s  for  free  because  I  feel  like  it  is  

such  a  good  deal.    However,  I  would  be  getting  the  exact  same  deal  if  I  only  took  one  

box  (and  I  would  maybe  stop  snacking  so  much!).    

  There  are  several  other  ways  that  consumers  let  numbers  get  the  best  of  

them.  

1. We  anchor  our  spending.    When  a  woman  walks  into  Michael  Kors  and  sees  

a  purse  for  $2,500  on  the  front  table,  she  is  taken  aback  by  the  price.    As  she  

strolls  towards  the  middle  and  back  of  the  store,  a  $700  bag  she  picks  up  

seems  to  be  a  bargain!    Often  times,  stores  will  strategically  place  items  in  

this  way  in  order  to  make  later  items  appear  very  reasonable  in  comparison.  

2. We  are  terrified  of  extremes.    We  often  avoid  the  least  expensive  item  for  

fear  of  being  “cheap”,  but  steer  clear  of  the  most  expensive  item  because  

there  is  a  happy  medium  somewhere  between  the  two.  

3. The  “9  Factor”.    Prices  ending  in  9,  99,  or  95  are  called  “charm  prices”.    

According  to  William  Poundstone,  we  have  been  culturally  conditioned  to  

associate  9-­‐ending  prices  with  discounts  and  better  deals.  

 

Layout  

  Lastly,  I  researched  the  ways  that  supermarkets  and  other  stores  get  inside  

of  consumers  heads  to  influence  the  shopping  experience.    Every  element  of  a  

supermarket,  from  the  parking  lot  to  the  checkout,  is  designed  to  make  customers  

spend  more  money  and  buy  more  than  they  anticipated  when  they  set  out  for  the  

store.    This  is  primarily  done  with  strategic  planning  in  terms  of  the  store  layout  

(Appendix  D).  

  High  margin  departments  are  almost  always  placed  at  the  front  of  the  store.    

For  example,  Harris  Teeter  places  floral,  bakery,  and  prepared  foods  at  the  store  

entrance.    This  is  done  so  customers  immediately  think  convenience  and  are  

therefore  willing  to  spend  the  higher  asking  prices  that  come  with  these  

departments.    Additionally,  when  a  customer  enters  the  store,  their  cart  is  empty  

and  their  spirits  are  high.    Flowers  and  baked  goods  give  off  pleasant  smells,  which  

make  shoppers  hungry  and  more  likely  to  make  impulse  purchases.  

  Dairy  products  and  other  staples  such  as  butter  and  juices  are  often  found  at  

the  back  of  stores.    This  placement  forces  customers  to  walk  through  all  other  

departments  and  pick  up  items  that  they  had  not  planned  on  purchasing.    Along  the  

way,  the  height  of  items  is  strategically  considered  in  order  to  tempt  shoppers.    The  

items  the  store  really  wants  shoppers  to  buy  (often  the  more  expensive  brands)  are  

placed  at  eye  level.    Sugary  snacks  and  cereals  can  be  found  at  kid’s  eye  level,  which  

leads  them  to  beg  mommy  to  buy  these  products.  

  Lastly,  many  stores  manipulate  consumer  spending  with  colors  and  music.    

While  warm  colors  attract  people  to  a  store,  cool  colors  encourage  contemplation  

and  higher  sales.    This  concept  is  adopted  by  Wal-­‐Mart,  who  often  designs  stores  

with  a  brick  exterior  and  blue  interior.    The  brick  exterior  draws  customers  in  

excitedly,  and  the  blue  interior  keeps  them  in  and  picking  up  more  items.    Stores  

such  as  Nordstrom  use  music  to  their  advantage  to  increase  the  shopping  

experience.    Slow  music  makes  people  take  their  time  and  spend  more  money,  while  

loud  music  makes  them  move  quickly  through  the  store.    Nordstrom  plays  classical  

music  in  order  to  make  people  relaxed  and  more  inclined  to  make  expensive  

purchases.  

  Sizing,  pricing,  and  store  layouts  are  just  three  current  trends  in  the  

psychology  behind  consumer  trending.    Although  this  course  is  coming  to  an  end,  I  

hope  to  continue  looking  into  these  trends  more  closely  as  well  as  to  explore  other  

related  areas.      

   

   

Works  Cited    "Harris  Teeter  -­‐  Neighborhood  Food  &  Pharmacy."  Harris  Teeter  -­‐  Neighborhood    

Food  &  Pharmacy.  N.p.,  n.d.  Web.  10  Apr.  2014.  <http://www.harristeeter.com/>.  

 Lubin,  Gus.  "15  Ways  Supermarkets  Trick  You  Into  Spending  More  Money."  Business    

Insider.  Business  Insider,  Inc.,  26  July  2011.  Web.  9  Apr.  2014.  <http://www.businessinsider.com/supermarkets-­‐make-­‐you-­‐spend-­‐money-­‐2011-­‐7?op=1>.  

 Thompson,  Derek.  "The  11  Ways  That  Consumers  Are  Hopeless  at  Math."  The    

Atlantic.  Atlantic  Media  Company,  6  July  2012.  Web.  10  Apr.  2014.  <http://www.theatlantic.com/business/archive/2012/07/the-­‐11-­‐ways-­‐that-­‐consumers-­‐are-­‐hopeless-­‐at-­‐math/259479/>.  

 "Tim  Hortons'  new  coffee  cup:  why  the  supersize?  -­‐  Canadian  Business."  Canadian    

Business.  N.p.,  n.d.  Web.  10  Apr.  2014.  <http://www.canadianbusiness.com/business-­‐strategy/tim-­‐hortons-­‐new-­‐coffee-­‐cup-­‐why-­‐the-­‐supersize/>.  

 "Tim  Hortons  supersizes  its  coffee  cups  |  Toronto  Star."  thestar.com.  N.p.,  n.d.  Web.  9    

Apr.  2014.  <http://www.thestar.com/business/2012/01/16/tim_hortons_supersizes_its_coffee_cups.html>.  

         

Appendix  A:  A  History  of  the  Big  Gulp  

 

 

Appendix  B:  Tim  Horton’s  coffee  cup  sizes  

 

 

 

Appendix  C:  Harris  Teeter  weekly  advertisement  for  “BOGO  Free”  

 

 

Appendix  D:  Supermarket  layout