Pricing Analysis part 1: Introduction

Pricing analysis is a crucial aspect of the FMCG retail industry as it helps companies determine the optimal price for their products. Pricing analysis involves examining market trends, competitor pricing, and customer behavior to identify the most effective pricing strategies that will maximize profits and customer satisfaction.

One example of a company that has successfully utilized pricing analysis is PepsiCo. In 2012, PepsiCo wanted to increase sales of its snack products in the UK market. To achieve this, the company conducted a pricing analysis that involved examining the price elasticity of its products and analyzing customer behavior.

The analysis revealed that customers in the UK were highly price-sensitive and that even a small increase in price could lead to a significant decrease in sales. Armed with this insight, PepsiCo implemented a new pricing strategy that involved reducing the price of its snack products by 5%. As a result, the company saw a 10% increase in sales of its snack products in the UK market.

Another example is Nestle. In 2014, Nestle wanted to increase sales of its coffee products in Brazil, which is a highly competitive market. The company conducted a pricing analysis that involved examining the prices of its competitors and identifying the price points that would appeal to Brazilian customers.

The analysis revealed that customers in Brazil were highly price-sensitive and that Nestle's coffee products were priced higher than its competitors. Armed with this insight, Nestle implemented a new pricing strategy that involved reducing the prices of its coffee products by 10%. As a result, the company saw a 15% increase in sales of its coffee products in Brazil.

These examples demonstrate how pricing analysis can help FMCG companies make informed decisions about pricing strategies, which can lead to increased sales and market share. By analyzing market trends and customer behavior, companies can identify the most effective pricing strategies that will maximize profits and customer satisfaction.