Cosmetics
Cosmetics are in the lifestyle and brand business, therefore pricing not only determines the profit you make when considering costs and customer preferences, but the price can suggest quality or exclusiveness of a cosmetic brand. Individuals respond emotionally to brands which is why customers are willing to pay a higher price for certain branding or characteristics regardless of the markup price.
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Challenges in Cosmetic Product Pricing
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.
Pricing and Revenue Growth Management (RGM)
In recent years, price optimization has expanded beyond just setting prices to a comprehensive strategy for maximizing total revenue. This includes considering prices, products, packaging, brands, ranges, and promotions together, known as Revenue Growth Management (RGM).
PriceBeam uses scientific and quantitative methods to eliminate uncertainty in pricing and RGM. Our predictive consumer & shopper insights reveal what consumers are willing to pay.
We focus on long-term RGM by providing ongoing consumer and brand tracking, along with AI-driven virtual shopper modeling. This allows us to simulate price changes, product adjustments, new product launches, competitor actions, and cost variations, including those from tariffs.
Inflation & Price Increases go Hand-in-Hand
Inflation is a constant factor, so it's crucial for RGM teams to understand and manage the effects of price increases. A key part of optimizing price increases is knowing consumers' willingness-to-pay (WtP).
If a product is priced below WtP, it has Pricing Power, making price increases easier. Conversely, if priced above WtP, there is a Pricing Power Deficit, making price increases challenging or even harmful.
PriceBeam's predictive insights on willingness-to-pay provide these consumer insights as either a one-time snapshot or through continuous tracking.
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Consumer and Customer Centric
PriceBeam provides insights into what consumers and customers really think. Using leading questioning and test techniques to capture sentiment and opinions, PriceBeam's results are based on live market perception.
Segmentation and Value Differentiation
Not all consumers are willing to pay the same price. In many consumer goods categories, the top 20% of buyers are willing to pay more than three times what the bottom 20% are willing to pay.
To effectively manage revenue growth, it's crucial to segment based on willingness-to-pay. This involves analyzing WtP insights by demographics, attitudes, channels, brands, flavors, packaging, retailers, and occasions.
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Price Pack Architecture
Revenue can and should be optimized across a variety of packaging dimensions through a strategic approach known as Price Pack Architecture, or PPA. This discipline is essential for businesses aiming to maximize their profitability by tailoring their offerings to meet consumer preferences.
PPA requires a deep understanding of how consumers perceive value and express their sentiments regarding different packaging options, whether it be through varying pack sizes, innovative pack designs, or diverse flavor offerings. By leveraging insights into consumer behavior and preferences, companies can effectively align their product packaging with market demands, ultimately driving increased sales and enhancing customer satisfaction.
Optimizing Promotional Prices & Mechanisms
Promotion is a vital part of the marketing mix. For many consumer goods brands, promotional spending is key to both budget and consumer engagement. It's essential to optimize promotional pricing and understand which promotional strategies appeal to consumers and shoppers.
PriceBeam's Promotion Lab and Promotion Lab Enhanced provide valuable insights into effective promotional strategies across different channels and retailers. Best of all, they offer concrete market data on expected ROI before launching a promotion.
By understanding how shoppers respond to promotions in terms of sales volume or revenue increase, you can compare promotion types across different channels, retailers, or countries, establishing best practices throughout the company.
Globally Available at Your Fingertips.
Our market insights are available in 127 countries worldwide. The best part: all you need to do is define the products and the target audience, and we take care of the rest, from translation and recruitment to the pricing science.
Why You Should Choose PriceBeam?
PriceBeam delivers strong value on a number of fronts, which is why our clients choose us.
Scientific Results
PriceBeam's studies ensure statistically significant results about willingness-to-pay.
Fast Insights
Results as fasts as 48 hours in B2C and 1-2 weeks in B2C.
Immediate Value
1% change in price delivers 11% improvement in value for the average company.
Easy to Use
You define the product and target market. PriceBeam takes care of the research and statistical details.
Global Reach
PriceBeam studies can be run in 127 countries. PriceBeam takes care of the localization.
Cost Effective
Using cloud technology, PriceBeam studies cost a fraction of classic, old-fashioned market research.
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