Any business with a product to market should understand the intertwining of economics, psychology and marketing.
This is where Quilted Northern missed the target. With the case of the smaller toilet paper roll, it's a quite simple example.
If you raise the price of each roll of toilet paper 2 cents, it is unlikely that your consumer will even notice the 10 to 25 cent raise in their toilet paper package, especially if you raise it slowly over time. The consumers that do notice will either stop buying the product or they will decide they don't care and continue to buy. The ones who stop will be a small percentage and may have stopped buying anyway.
On the other hand a consumer that pays the price they have been paying for their toilet paper but opens it and finds a smaller roll feels cheated and ripped off. The actual visual of a smaller product has a major impact on buying decisions, especially when there is a somewhat standard size for toilet paper.
This also effects any loyalty the consumer may have with the brand. They think "this brand cheated me" and will most likely never come back to it.
This intense feeling of being cheated by a company turns viral and you have rip off reports and blogs like mine reporting this feeling.
You never see rip off reports or blogs reporting their toilet paper now costs 15 cents more per package.
The way I see it, Georgia Pacific and Quilted Northern could use a good refresher in the importance of the psychology behind consumer purchases and marketing.