Developing the correct regular pricing strategy is fundamental to brand owners in today’s market-place. Getting the value equation right for consumers is essential for successful growth and requires a thorough understanding of the regular pricing dynamics influencing the consumer decision-making process. Examples of the questions manufacturers and retailers need to address include:
- Who are the key regular price competitors?
- Which is the most important regular price dynamic: absolute regular price level or regular price position relative to competition?
- What are the relevant regular price elasticities?
- How do these vary by retailer and state?
- What emotional price points exist in the market?
- What are the likely volumetric and profitability impacts of alternative regular price positions and competitive responses?
- What are the risks associated with a specific proposed regular price move?
- What is the optimal price position/strategy to achieve business objectives?
ACNielsen has developed a series of modelling and consultancy approaches to help companies understand the impact of regular pricing activity and develop the optimal regular pricing strategy. The approaches used are designed to provide clients with the best possible information on which to base future regular pricing decisions and incorporate a full assessment of the risks involved with a specific proposed regular price move.
ACNielsen regular pricing models use weekly scanning data to fully understand how movements in regular price position impact the performance of a brand.
Other techniques such as Brand Price Trade-Off analysis - asking consumers how they would respond in a series of hypothetical pricing scenarios - can be used to assess the likely reaction to a brand new price position in any industry.