Webinar: Pricing beliefs uncovered
Setting the right price is vital for every company. It allows you to communicate your brand's value in relation to competitive offerings and is therefore a major marketing lever. The question remains, though: How far can one go in increasing price while still maintaining the perceived value of the brand? Over the past 5 years, SKIM has carried out more than 200 pricing studies covering 18 different countries, more than 7,000 SKUs and about 500 brands in 45 product categories. Tapping into this wealth of information we have sought to create a database to leverage knowledge and identify behavioral trends on pricing. Join Daniela for this webinar in which she reveals the three main factors which drive price elasticity. For more information about SKIM's webinars, visit www.skimgroup.com/webinars
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Webinar: Pricing beliefs uncovered
- 1. Uncovering pricing beliefs 1 Daniela Piacenza Account Director d.piacenza@skimgroup.com Alyse Malmstrom Today’s Webinar Host a.malmstrom@skimgroup.com Based on a meta-analysis performed with more than 200 pricing sensitivity studies! Share your thoughts online: #SKIMwebinar
- 2. 2 How far can one go in increasing the price and still maintaining the perceived value of a brand? 200+ Price Sensitivity Studies 18 countries 7,000 SKUs 500 brands 45 categories
- 3. So … what is price elasticity? 3.5% 4.0% 4.5% 5.0% 5.5% $2.49 $2.99 $3.49 $3.99 $4.49 $4.99 3 -20% -10% 0% 10% 20% $2.49 $2.99 $3.49 $3.99 $4.49 $4.99 Volume Share Change in Volume Share Elasticity -0.11 -0.15 -1.06 -1.06 -0.46 -0.11 -1.06 -0.15 -1.06 -0.46 -20% -10% 0% 10% 20% -29% -14% 0% 14% 29% 43% Price Change VolumeShareChange
- 5. Price elasticity drivers • Retail channel • Category • Price Tier • Pack size • Purchase Frequency • Gender 5
- 6. Are there any differences across channels ? 6 HFS
- 7. It is not about the category… 7 SKU -1.25 -1.12 -1.11 Average Elasticity Brand -0.99 -0.72 -0.81
- 8. It is about the level of involvement 8 Low/medium involvement High involvement -1.21 -1.05SKU Brand -0.84 -0.76
- 9. 9 Low Medium High Avg. Price Index vs. Category Avg. Higher Revenues The lowest price tier is not necessarily the most price elastic in any given category 0.72 1.18 1.61 1.64 1.37 Index
- 10. Larger Packs tend to be more price elastic 10 Brand -0.69 -0.74 -0.76 SKU -0.95 -1.09 -1.29
- 11. Frequently bought products exhibit higher price elasticity 11 PF 1-2 Weeks 3-4 Weeks 2-3 Months Less often than 2-3 months Brand SKU -1.34 -0.91 -1.11 -0.79 -1.09 -0.77 -1.04 -0.71 Average Elasticity
- 12. Categories dominated by women are more price elastic than those dominated exclusively by men 12 -1.15 -0.99 -0.78 -0.61 Avg. Brand Elasticity Avg. SKU Elasticity
- 13. So what have we learned today? When it comes to increasing the price of your products… 1. Retail channel matters 2. Purchase involvement and frequency matters 3. Size matters 4. Price tier matters 5. Gender matters At SKIM we can help you tailor your pricing strategy taking these factors into consideration 13
- 14. Uncovering pricing beliefs 14 Daniela Piacenza Account Director d.piacenza@skimgroup.com Alyse Malmstrom Today’s Webinar Host a.malmstrom@skimgroup.com Review all SKIM webinars : www.skimgroup.com Share your thoughts online: #SKIMwebinar