RSP-per-kg Incentive Curve: The Single Most Important Diagnostic in Pack Architecture

The price incentive curve is the single most important diagnostic in Price Pack Architecture. It plots price per unit (PPU) on the vertical axis against pack size on the horizontal axis. In a well‑designed portfolio, the curve slopes downward: larger packs offer a lower price per unit, rewarding consumers for buying more.

What a Downward Slope Buys You

This downward slope is the incentive, the economic reward that motivates consumers to trade up from a small pack to a larger one. Without this incentive, consumers have no rational reason to buy the bigger format. With too much incentive, the small packs become uncompetitive and the large packs cannibalize the profitable singles.

Reading the Shape

The shape of the curve tells you how the range was priced:

• A smooth, gently declining curve signals coherent pricing architecture
• A jagged or irregular curve signals ad hoc pricing decisions made without portfolio context
• A flat curve signals no trade‑up incentive at all
• An inverted section (where a larger pack has a higher PPU than a smaller one) signals a pricing error that confuses consumers and destroys value

Every FMCG company should be able to draw its incentive curve from memory. Most cannot, which is how a mispriced step survives for years without anyone noticing it.

Price Per Unit (PPU) = Pack Price / (Pack Size x Unit Weight)

Where Unit Weight normalizes across formats (e.g., per 100g, per liter, per serving).

Incentive Index = (PPU of Pack X / PPU of Reference Pack) x 100

The reference pack is whichever pack you choose to hold at 100, and that choice changes every number after it. If the 50g single‑serve costs $1.50 (PPU = $3.00 per 100g) and the 300g family pack costs $4.99 (PPU = $1.66 per 100g), then:

Incentive Index (300g) = ($1.66 / $3.00) x 100 = 55

Read against the 50g, the family pack carries a 45% per‑unit advantage.

Say which pack sits at 100, every time

Two people can index the same shelf and come back with different answers, because one anchored on the smallest pack and the other on the everyday pack. This lesson anchors on the Routine pack, the one carrying most of your volume, and every role marker you meet later is read against that. An index built off the smallest single‑serve is a different scale, so a marker written for one convention means nothing on the other.

A premium biscuit brand plotted its incentive curve across five pack sizes:

• 50g single‑serve: $1.49 (PPU = $2.98/100g), Index 100
• 150g standard: $3.29 (PPU = $2.19/100g), Index 74
• 250g sharing: $4.99 (PPU = $2.00/100g), Index 67
• 400g family: $5.99 (PPU = $1.50/100g), Index 50
• 750g tin: $8.99 (PPU = $1.20/100g), Index 40

Where the Curve Was Leaking

The curve revealed two problems. First, the 400g family pack (index 50) was far too cheap relative to the 250g sharing pack (index 67), a 17‑point drop for just 150g more product. This steep section was cannibalizing the sharing pack. Second, the 750g tin (index 40) was priced so aggressively that it was destroying margin without generating proportional volume.

By adjusting the 400g price to $6.99 (index 59) and the 750g to $10.49 (index 47), both read against the 50g single‑serve at 100, the curve smoothed out. The 400g price increase held with only a 3% volume decline. The 750g adjustment reduced volume 8% but improved margin per unit by 17%.

When an experienced RGM manager looks at an incentive curve, they are asking three questions at once.

The Three Questions a Curve Answers

1. Is the gradient commercially sensible? A curve that drops too steeply says "we are giving away too much value on large packs." A curve that barely drops says "we are not giving consumers any reason to trade up."
2. Are there structural breaks? Any point where the curve flattens, inverts, or jumps signals a pricing decision that was made in isolation. These breaks are the priority fixes.
3. What does the competitor curve look like? If your curve is steeper than the competition, your large packs look like bargains (good for volume, bad for margin). If your curve is flatter, your large packs look expensive (good for margin, vulnerable to competitor trade‑up).

Most FMCG portfolios have accumulated pricing decisions over years of individual negotiations, cost‑plus calculations, and promotional activity. The incentive curve exposes the accumulated inconsistencies in a single picture.

Each pack on the curve also carries its own price elasticity, the link back to Pricing Lesson 1 (Elasticity). Entry packs tend to land at -2.0 to -2.5 because constrained shoppers comparison‑shop heavily, the Routine sits near the -1.7 to -1.8 most teams plan an established brand at when they have measured nothing, and Upsize packs priced in the guidance range attract value‑seekers who can reach -2.5 to -3.0. Those are the shapes published work reports, and elasticity is entirely context‑specific, so your own ladder can sit well outside all three. Those shoppers respond strongly to a per‑kilo saving, which is what makes a big per‑kg gap worth considering at all. It is not what makes it affordable: whether the gap pays for itself is a break‑even question against your own margin, and on a thin margin the answer is often no.