Strategic Pricing and Trade Promotion Efficiencies
When one experiences a sharp fluctuation with commodity prices that go into finished products, the timing is right to consider a series of pricing actions to protect margins. But rather than simply changing list prices and trade promotion monies across-the-board to capture these cost fluctuations, the opportunity exists to take a more strategic approach to the way these price changes are determined.
At Management and Marketing Solutions, we have worked on a wide variety of brands and product categories, where we’ve been engaged in planning price and trade promotion changes. What we’ve learned from these experiences is adopting a “scalpel approach” (vs. gross across-the-board price increases), has been instrumental in assisting brands and entire product categories plan various pricing scenarios. Using then both price and cross-elasticities in conjunction with our Price Planner model, we’ll help you with tailoring a pricing program that will help maximize revenue and profit, or build an understanding as to the trade-offs one can make amongst these financial metrics.
Our final step then is to work with you in assembling the materials needed to justify one’s pricing actions to the retail trade, as part of the price implementation process. Indeed gaining the cooperation of one’s retail trading partners is critical to making any pricing action work, as ending up with the wrong price-point can be the result of a poorly executed pricing action. MMS’ aim thus is to work with your business through the entire strategic pricing process so that you realize the maximum value from your efforts.