Getting your price point right – at what point do you risk alienating your consumers?
Due to high inflation and the rising cost of doing business right through the supply chain, many suppliers are grappling with the value equation – how much can they increase the price before they risk alienating their consumers? If it is an option, should they hold their price and reduce the pack size?
TWC Consulting can analyse your sales data and conduct consumer research to help you make an informed decision.
THE CONTEXT
We recognise that many suppliers are grappling with pricing decisions at the moment as you respond to rising costs. We have seen from multiple research studies that what a consumer claims they are willing to pay does not always translate into action at the point of purchase. There are too many other variables that come into play when a consumer is in ‘shopping mode’, e.g. promotions, position on shelf, NPD, POS, competitor activity.
THE SOLUTION
it is important to combine consumer data with an analysis of past sales (EPOS) data to truly understand price and it’s impact on sales. Ideally, we need to also review retailer behaviour – what are they buying and at what price (through wholesale shipment data). It is only by analysing long term sales data that we can start to understand the price elasticity of a product and the impact of other variables.
THE IMPACT
Make pricing decisions with confidence by weighing up the variables within your control to ensure that not only are you meeting the needs of the consumer/shopper but also ensuring that there is a fair margin for the wholesaler and the retailer. We will also work with you to clarify your brand objectives since your price and promotional strategies will depend on what you are trying to achieve.
“A very insightful piece of work that will help us make decisions internally”
