Price is king, and consumers know it. A survey of UK consumers found that 66% of UK consumers prioritize price when determining what to buy. This finding is not surprising, as the dynamics of pricing play a vital role for both consumers and decision-makers. This is why 93% of CPG/FMCG industry decision-makers are already using data to optimize prices and promotions.
However, in order to optimize their pricing and promotions, decision-makers must first consider the triggers that cause them to reconsider their pricing strategies, as well as the obstacles that stand in their way.
Factors that Trigger Pricing Strategies:
- Competition: Keeping an eye on competitors’ pricing strategies is necessary to instantly adjust their prices.
- Raw Materials: The cost of raw materials can fluctuate which can affect the cost of production.
- Demand Imbalance: Demand for products can fluctuate due to seasonality, the economy, and new products.
Barriers to Effective Pricing Strategies:
- Guesswork: Many decision-makers rely on gut instinct and historical data to make pricing decisions.
- Limitations of Excel: Excel can be time-consuming and difficult to use. This can lead to errors and missed opportunities.
- Meetings Stalemate: Pricing decisions are often made by a team of people, which can lead to disagreements and delays.
The Smart Way Forward:
CPG/FMCG companies are always looking for ways to improve the dynamics of pricing in their strategies to win over consumers and increase their profits. The Smart Value™ Platform is a solution that can assist them in doing so through data centralization and data analytics capabilities:
- Automated Data Pipelines for Different Modules: This enables decision-makers across departments to have access to the latest insights.
- Accurate Predictions: The use of machine learning allows decision-makers to make the optimal pricing decision for their specific situation.
- In-Depth Insights: This helps decision-makers make better pricing decisions that are more likely to be successful.
- Agility and User Friendly: The platform is an agile and easy-to-use tool that enhances human’s efficiency and productivity across departments.
- Different Scenarios: This allows decision-makers to run different scenarios to test the impact of different pricing strategies.