In response to the devaluation of the Egyptian pound and concerns over inflation, the IMF downgraded its GDP growth projection for the country to 3.6% in 2024, while also raising its inflation forecast for Egypt to 32.2% in the same year. Additionally, according to CAPMAS (Central Agency for Public Mobilization and Statistics), Egypt’s inflation rate surged to a record-breaking 39.7% in August. This marked the third consecutive month of exceptionally high inflation, exceeding the previous peak of 34.2% in July 2017.
In today’s volatile economic environment, it’s more important than ever for FMCG companies to protect their profits and develop resilient marketing plans for 2024. One way to do this is for decision-makers to use data analytics and predictive modeling to set optimal prices and make informed decisions about other revenue-generating activities.
Many businesses are hesitant to raise prices, even when faced with rising costs. This is because they worry that they will lose customers or market share. However, data analytics can help businesses understand the price elasticity of their products, which is the sensitivity of demand to changes in price. This information can then be used to set prices that maximize profits without losing too many customers.
How to Identify Price Sensitivity:
There are several ways to identify price sensitivity. One common approach is to use historical sales data. For example, a business could compare sales data from periods when prices were higher or lower to see how the demand responded. Another approach is to use surveys or experiments to collect data for identifying customer preferences.
Using Data Analytics and AI:
Using data analytics and AI models can provide businesses with a deeper understanding of how customers react to different prices and what they perceive as valuable. This information can be used to set prices that are both profitable for the business and fair to customers.
Marketeers’ Smart Value™ is a complete 360° solution for business growth. It empowers you to gain a holistic view of your business and market landscape, uncovering gaps and opportunities for sustainable revenue growth.
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