Consumer Goods Pricing
Pricing FMCG/CPG has long been one of PriceBeam’s primary areas of expertise. Consumer goods companies benefit from price optimization more than any other industry, but at the same time, it is often an incredibly challenging task. In fact, only as little as 12% of consumer brands have a winning pricing strategy. Thus, the demand for our services in this industry is high and consequently, we have grown in expertise with the many projects we have done.
One of the most vexing challenges faced by FMCG/CPG firms is setting one price that unifies all internal objectives: one price that simultaneously boosts top-line growth, is aligned with the brand positioning, and increases penetration and growth.
Our pricing solution addresses this challenge by using data and statistics to find a price that does just that. And it works every time.
PriceBeam has worked with companies from a broad range of industries, and we apply the best practices from all industries when we help FMCG/CPG firms optimize their pricing. In that way, we continuously improve and innovate our current pricing method, making sure it stays ahead of the game and is adjusted to prevailing industry trends.
Some of the common usages of our pricing solution by FMCG/CPG firms:
- Maximizing long-term profit
- Ensuring budget accuracy
- Minimizing churn from price changes
Your customer is the one paying the price you charge and so, your pricing should be customer-centric. Ultimately, all that matters is how much your customer is willing to pay for your product - and that’s what PriceBeam helps you identify. We conduct extensive market research and collect data that is eventually used to graph your customer’s true willingness-to-pay so you can develop a winning pricing strategy and become one of the rare pricing champions in the consumer goods industry.
Case study - Audio Speakers
The company doubled the landed cost of the speakers, which are made in China. This set the price at $71.33. These speakers have a number of features that make them unique, and PriceBeam research showed that consumers were, in fact, willing to pay up to $150 for these specific differentiators. Since the product was already on the market, the company could not just increase prices overnight, so during a period of 18 months, the company increased the price of this product in steps to $149.95. This resulted in a 70% increase in revenue with virtually no drop in sales volume.
Case study - dash cam
A dash cam records video through the windscreen of a car. It “sees” what the driver sees. Dash cams are widely popular in Russia and Asia, where they are used as proof of events in case of insurance claim. The company, a car accessory firm, wanted to introduce a dash cam to the U.S. audience. They had plans for pricing the device somewhere between $200-300 and focusing its marketing on, for them, traditional channels: magazines and websites focused on a male car enthusiast audience.
PriceBeam research showed that women had a higher willingness to buy than men, which would lead to an estimated ~25% higher revenue if sold to them. Also for the specific features of this dash cam (lane departure warning, collision avoidances warning, and 4k image resolution), demand was inelastic to $500, where there was a substantial price wall.
This changed everything for the company. They decided to focus on marketing to women in magazines and at websites following celebrities and celebrity events. They decided to price the product at $499 and to focus marketing messages specifically on what made sense for women, which was substantially different than what males were looking for in a dash cam.