The first time I ever heard the term just noticeable difference or jnd I was studying psychology in college. The professor used the candy bar as an example to describe the term. He began by asking the question as to whether or not we thought the candy bars that kids got at Halloween these days were the same size as they had been during our childhood. This immediately hit home with me as I already had a child and was embarrassed to give out those tiny candy bars that were much smaller than I received as a kid. The funny thing is that today?s kids never seemed to mind.
Our professor went on to explain that if a candy bar were made just enough smaller so that you would not notice that consumers would still buy it for the same price. If you continued the practice over time the product would become smaller requiring fewer ingredients and smaller packaging. The product could now be sold at the same price with lower costs and little flack from consumers.
By definition, a just noticeable difference, which is normally abbreviated as jnd, is the tiniest detectable difference between a starting and next level of a particular sensory stimulus. Human sensory systems do not respond identically to the same stimuli on different occasions which explains the candy bar story..
I?m sure you are wondering how this relates to procurement and my sandwich?
I have a favorite place that I frequent for lunch that is owned by a supermarket company that has fallen on hard times recently. Their high end store has a wonderful selection of items for lunch including salad bar, a terrific deli, pizza, and an outdoor grill. One of my favorite items is a grilled rib eye sandwich. I have commented to many people that this is the best steak sandwich in the country. Historically the steak hangs outside a large bun and is about a half inch thick. My guess would be that it?s at least a seven ounce piece of meat.
This sandwich is something I probably only order once month but look forward to. Recently I decided that I was going to have one and placed my order and went to sit and wait for the sandwich. When I went to pick up the sandwich it was handed to me in a much smaller box (clue). When I opened it to add condiments, I noticed nothing hanging out side the bun. Removing the top of the roll, I noticed a piece of meat that was much thinner and folded which would not have been possible previously. So much for the jnd approach. I was still paying the same price for this much smaller product, and was not happy.
Obviously this company is trying to reduce costs, and that?s ok. In this case they are either ordering or cutting much smaller pieces of meat for this sandwich which saves them money and then trying to sell the product for the same price to consumers, and that?s not ok. Consumers may miss psychological practices like jnd used over a long period of time. We do however pick up on very large changes that are made that result in a cost benefit that does not include us.
Consumers understand when companies fall on hard times and that sometimes drastic actions need to take place. Companies should however be careful to not make business and marketing decisions that have a negative impact on their brand or consumer loyalty.
There are numbers of ways to reduce the cost of goods and services that this author posts on regularly. There are many great marketing opportunities that can result from cost savings. Many of these can positively impact consumers and result in improved loyalty and increase market share.
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