Pricing

The price of a product or service is one of the strongest drivers of profitability, and offers tremendous potential for both pitfalls as well as opportunity across most industries. Pricing decisions are complex and go beyond traditional financial notions of manufacturing and supply chain costs plus.

At the heart pricing is a marketing variable that is directly linked to driving demand, by positioning the product, incenting channels ad attracting consumers. While many managers often believe prices can not be influenced or are given by the market realities are that there is significant room to increase financial value generation through innovative approaches to pricing management.

Case Study Packaged Goods Growth Through Better Pricing

Situation

A multinational packaged goods brand was experiencing decreasing market share versus leading competitors in the market, as well as lower profitability resulting from increased costs of goods and less responsive marketing and promotions.

Approach:

Ninah analyzed the key levers of growth and market share for the client and competitor brands and dispelled existing beliefs that client marketing efforts were flawed. While the client brand was cheaper in the market consumers believed client brand was more expensive because of the relationship between product variants, price and price promotion. A drastic change in pricing and promotional strategy was recommended.

Results

Upon implementing the change the client experienced a reversal in the share erosion and significantly higher margins. Additionally the pricing changes positioned the brand to better face increasing raw materials costs without losing consumer demand.