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Re-engineering quick pricing solutions

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Due to ever-increasing competition between both local champions and global brands, the battle for share at the shelf has never been bigger. With price playing a pivotal role in the retail environment, manufacturers today constantly need to ensure their pricing hits the sweet spot. While conjoint and DCM studies are best placed to provide insights to optimize the product offer and pricing strategy, they are relatively time intensive and costly.To get quick and cost-effective insights into pricing when needed, companies often fall back on conventional tools such as Van Westendorp and Gabor-Granger. Although these methods provide an indication of the optimal price (range), business needs of today demand a re-engineering to provide more complete insights. Building on the Van Westendorp price meter, SKIM has applied its best practices in pricing research to enable companies to make more informed decisions on pricing matters, even when timings are tight. The approach allows companies to estimate actual uptake of a product at different price points as well as likely sourcing from competition. It is also optimized for online self-administration on any device which makes it a more fun and intuitive exercise to consumers.

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Re-engineering quick pricing solutions

  1. 1. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 Re-engineering pricing solu/ons Ajay Chourasia SKIM Asia
  2. 2. What are the emerging technologies in Market Research? Ray Poynter, The Future Place Festival of #NewMR 2018 NewMR 2018 Sponsors Pla/num Gold Silver Communica/on Your name here? S/ll /me to be a 2018 NewMR Sponsor
  3. 3. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 Importance of pricing selling price operating profit! +1% +8.7%
  4. 4. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 Brands conduct sophis/cated conjoint pricing studies with companies like SKIM >250 pricing & porPolio studies in the past 5 years Millions of shopping trips Thousands of products 45 categories San Francisco New York London RoSerdam San Jose Singapore Atlanta Rio de Janeiro = current loca/ons = countries in which SKIM has conducted research
  5. 5. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 BaOle between Local & Champion brands has intensified & will only get fiercer in the region
  6. 6. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 Hence the need of the hour Agile Affordable Ac/onable
  7. 7. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 Companies fall back on tools such as Van Westendorp ü  Provides an op/mal price range ü  Does not require specific price inputs, nor detailed informa/on of compe//on ü  High familiarity with most clients and hence widely used •  Does not factor in compe//on or the impact it has on pricing •  No indica/on on source of volume gain/ loss in case of a price change Cheap? So cheap you would doubt its quality? Expensive? So expensive you would never buy it? IDR…. IDR…. IDR…. IDR…. 4 Price Points IDR
  8. 8. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 Business needs of today demand a re-engineering of these tools to provide a complete picture Calibrate to arrive at a realis/c uptake of the product Inform respondents by showing current prices of compe/tors Iden/fy key price thresholds in context of compe//on Understand source of volume for price changes
  9. 9. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 Unilever was looking to maximize profits for its juice brand through price changes Whether a price change could help to protect margins & increase revenue What would be the impact of the price change on revenue and volumes Which brand is likely to gain/ lose due to a price change
  10. 10. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 Considering revenue and volume gains a price decrease would work best for the brand Van Westendorp pricing meter Uptake and revenue poten/al Uptake at current price: 47% Uptake at op/mal price: 55% Revenue gain: 5.7% 5,500 ‘Op/mal’ 3,200 Current: 3,250 2,700 SKIM Pricing model DemandRevenue Current: 3,250 Op/mal: 3,000 * Results presented are hypothe1cal to maintain confiden1ality of data
  11. 11. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 The price change also benefiOed the brand as it sources most of the volume from close compe/tors 34% 30% 26% 10% Source of Volume Minute maid Jungle Juice Floridina Others A price decrease leads to a poten/al volume gain of 6%
  12. 12. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 The stakes for hidng the sweet spot has never been higher Increasing compe//on High shopper awareness Increasing pressure on profits
  13. 13. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 Thank You! Ajay Chourasia Senior Manager +65 6597 0961 a.chourasia@skimgroup.com
  14. 14. Re-engineering pricing solu/ons Ajay Chourasia, SKIM Asia Festival of #NewMR 2018 Q & A Ajay Chourasia SKIM Analy/cal Pte Ltd Sue York NewMR
  15. 15. What are the emerging technologies in Market Research? Ray Poynter, The Future Place Festival of #NewMR 2018 NewMR 2018 Sponsors Pla/num Gold Silver Communica/on Your name here? S/ll /me to be a 2018 NewMR Sponsor

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