The magic of 5 and 10 rupees in the Indian market has been made for a long time. These have become not just two price points but have become a symbol of the power, trust and habits of the purchase of crores of consumers of the country. When GST came into force in the country and tax rates were cut, most companies did not tamper with these prices.
Even if the tax has decreased, the input cost has decreased, companies do not want to change the price points of 5 or 10 rupees. Instead of reducing the price, they choose to give a little more goods at the same price. But in such a situation, the biggest question arises that why so?
Will the demand of price points of 5 and 10 rupees be increased?
The direct answer is that once the price changes, the whole strategy has to be changed i.e. packaging, supply chain, explaining the shopkeepers and the biggest thing is tampering with the consumer habit. Now when new GST rates are applicable, many FMCG products like snacks, biscuits or salty etc. will become cheap due to reduced tax. But companies will usually choose to increase the quantity in the quantity instead of changing the price points of 5 and 10 rupees as usual. With this, customers will get a lot of things at the same price points, which they have a habit. And in this way the demand of FMCG products of Rs 5 and Rs 10 may increase further.
5 and 10 rupees: not just price but part of thinking
The magic of 5 and 10 rupees price points is not just by fit in the pocket, but it is from going home in people’s mind and behavior. Especially for people living in villages, small towns and urban slums, these prices seem easy, straight and inexpensive for those who live on daily earnings. They do not need to think anything and buy a packet of biscuits, shampoo or salty packet for 10 rupees directly for 5 rupees.
It can be said that this purchase is also required and habit. Therefore, for FMCG companies, 5 and 10 rupees are not just a price, but a means of keeping your customer connected.
Profit formula: low price, sale more
The biggest strength of the FMCG sector is to sell more quantity in low margin. If a biscuit of a company sells millions of packets every day, then increasing even one rupee in it can spoil its game. People can immediately turn to another company, which is giving the same thing for 5 or 10 rupees.
So when expenses increase, companies reduce the size of the packet, but keep the price the same. Due to this, the customer is also happy and the company’s mathematics is also correct.
Price point affects the entire supply peace
These prices are not just a tag seen at the shop, but the entire supply chain rests on them. Packaging size, transport methods, shops racks, and shopkeeper’s margin, everything is set at 5 and 10 rupees. Grocery shopkeepers also like such packets, because they are sold fast and are purchased again and again. This keeps their sales and customers also return.
Now the trend of 10 rupees price point is
A few decades ago, 1 and 2 rupees were common prices. Then came a round of 5 rupees. But now 10 rupees are coming out like a new minimum price point. In the villages too, people now consider it common to buy shampoo or snacks for 10 rupees.
This change shows that people’s earnings have increased and they also want good and branded goods, not just cheap. The customer now expects quality for 10 rupees. This is the reason that today most snacks, chocolate, soap, toothpaste or small sku (small pack) of all come at these prices.