PriceGain helps packaged food producers price their products through multiple channels and within their specific categories in order to optimize volume and profitability.
Packaged food manufacturers struggle with a number of factors when trying to price their products for retail channels. Food retailers are often demanding and the manufacturer is often in a weak negotiating position.
Food retailers range from small convenience stores on urban street corners to huge mega markets in the suburbs, each one carrying a different set of brands, categories and product ranges. It is within this competitive environment that producers of groceries compete.
Selling food products through multiple retail channels presents specific pricing challenges that PriceGain has solved successfully. We have developed techniques that allow us to simultaneously optimize prices on multiple products in multiple channels.
How to set prices in multiple competitive environments.
PriceGains experience reveals that different store types constitute completely different competitive environments. The food manufacturer must carefully analyze buying habits for their customers in each separate channel. The major challenge is to optimize pricing across these multiple channels and respond to constantly changing prices from multiple competitors.
PriceGain’s unique approach to pricing grocery products.
There are three major advantages to the PriceGain approach to pricing for packaged food manufacturers:
- Special techniques that allow us to optimize pricing across multiple channels
- Ability to identify the exact optimal price for all products in a category
- Ability to fine-tune the model based on changes to competitors prices
Some food producers typically perform a conjoint analysis and then examine their findings based on observed price sensitivities of the individual products in the study. We find significant limitations in this approach.
Conjoint analysis is not enough.
The basis of a conjoint analysis approach in pricing projects is to establish the relationship between price and demand. In most cases, pricing companies focus on the individual price elasticities that result from the conjoint analysis without understanding the cross product effects and the impact on overall profitability and demand. This means that you often leave money on the table and in the worst case your profit goes down when you change multiple prices at once.
PriceGain takes a different approach. We identify the exact optimal prices for products sold through multiple channels. In addition, our unique approach allows us to identify optimal prices for all products in a category simultaneously.
PriceGain develops a pricing model that is unique to your business. This model is designed to accept new competitive data as well. As your competitors change their pricing, you can use the PriceGain model to figure out how you should respond in order to maintain or improve profitability and/or market share.