How Downsizing a Typical Product at a Stable Unit Price Recalibrates Price Perceptions: A Contrast–Assimilation Account of Perceived Category and New‐Product Expensiveness

ABSTRACT Managing perceived expensiveness is critical in competitive retail environments, especially amid inflation and heightened price sensitivity. We demonstrate that fast‐moving consumer goods (FMCG) retailers can influence these perceptions by reducing the volume of a typical product in an assortment while keeping the unit price stable (i.e., product downsizing with a proportional price adjustment). This tactic lowers the product's absolute price tag, serving as a salient cue that decreases the perceived expensiveness of the entire product category assortment. As such, retailers avoid margin sacrifices typical of alternative steep discounting tactics used to induce perceptions of inexpensiveness. Moreover, employing product downsizing with a proportional price adjustment may entail limited risk of consumer backlash, as the quantity–price ratio remains stable. However, we also observe that this tactic simultaneously increases perceived expensiveness of a newly introduced product within the assortment. We explain these opposing effects through a psychological mechanism involving generalization–assimilation and contrast processes and reflect on managerial implications. We provide empirical evidence from three experimental studies ( N = 447, N = 476, N = 294), employing visual scenario‐based online surveys and using FMCG goods (i.e., chocolate and soft drinks) as stimuli. The studies identify assortment size as a moderator, demonstrate that unit price disclosure attenuates several process effects, and highlight the need for research using multi‐brand and/or multi‐category assortment depictions. Theoretically, our work builds on reference price research, signpost roles of products caused by underlying price anchoring phenomena, and consumers' asymmetric sensitivities to price versus quantity changes. The expensiveness management tactic proposed seems especially suited for FMCG environments, because such products typically elicit low elaboration likelihood, leading consumers to rely on salient cues, and are commonly offered in varying quantities.