Webinar: Pricing beliefs uncovered

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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. 1. Uncovering pricing beliefs1Daniela PiacenzaAccount Directord.piacenza@skimgroup.comAlyse MalmstromToday’s Webinar Hosta.malmstrom@skimgroup.comBased on a meta-analysis performed with more than 200 pricing sensitivity studies!Share your thoughts online:#SKIMwebinar
  2. 2. 2How far can one go in increasing the price andstill maintaining the perceived value of a brand?200+ Price Sensitivity Studies18 countries7,000 SKUs500 brands 45 categories
  3. 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 $4.993-20%-10%0%10%20%$2.49 $2.99 $3.49 $3.99 $4.49 $4.99Volume 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 ChangeVolumeShareChange
  4. 4. Brand elasticity4SKU elasticity<
  5. 5. Price elasticity drivers• Retail channel• Category• Price Tier• Pack size• Purchase Frequency• Gender5
  6. 6. Are there any differences across channels ?6HFS
  7. 7. It is not about the category…7SKU -1.25 -1.12 -1.11Average ElasticityBrand -0.99 -0.72 -0.81
  8. 8. It is about the level of involvement8Low/medium involvement High involvement-1.21 -1.05SKUBrand -0.84 -0.76
  9. 9. 9LowMediumHighAvg. Price Indexvs.Category Avg.Higher RevenuesThe lowest pricetier is notnecessarily themost price elasticin any givencategory0.721.181.611.641.37Index
  10. 10. Larger Packs tend to be more price elastic10Brand -0.69-0.74-0.76SKU -0.95-1.09-1.29
  11. 11. Frequently bought products exhibithigher price elasticity11PF1-2 Weeks3-4 Weeks2-3 MonthsLess oftenthan 2-3 monthsBrand SKU-1.34 -0.91-1.11 -0.79-1.09 -0.77-1.04 -0.71Average Elasticity
  12. 12. Categories dominated by women are more priceelastic than those dominated exclusively by men12-1.15 -0.99-0.78 -0.61Avg. Brand ElasticityAvg. SKU Elasticity
  13. 13. So what have we learned today?When it comes to increasing the price of your products…1. Retail channel matters2. Purchase involvement and frequency matters3. Size matters4. Price tier matters5. Gender mattersAt SKIM we can help you tailor your pricing strategy taking thesefactors into consideration13
  14. 14. Uncovering pricing beliefs14Daniela PiacenzaAccount Directord.piacenza@skimgroup.comAlyse MalmstromToday’s Webinar Hosta.malmstrom@skimgroup.comReview all SKIM webinars : www.skimgroup.comShare your thoughts online:#SKIMwebinar

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