Price Elasticity research in retail

Our client's management team (global food producer) was uncertain about the impact of a possible price policy change. Some arguments were raised for increasing the prices (due to innovation and high value perception), but at the other side were concerns about the brand positioning and price sensivity impact on demand.

Given the volume strategy of the organisation, a crucial decision to make...

How we helped

Our team supported the decision making with ;

. investigating price elasticity per segment/channel/region
. investigating the price/value perception vs the next best alternatives
. investigating the price sensitivity per segment
. tesing the impact of a possible value differentiation strategy (re-packaging) on price sensitivity
. testing a possible price differentiation strategy (volume discounts) on price elasticity and volume impact

The impact

The management team got aligned and confident to have 'fact based' insights to make the right decisions
Price differentiation installed in some countries
Price increase implemented of 1,5% without volume loss, resulting in profit improvement
Extra revenues to be invested in innovation and additional marketing efforts
A roadmap for new product innovation for specific segments was defined