Pricing of packaged consumer goods

Getting the Price Right
A client in the packaged consumer goods sector was planning to launch a new premium priced brand in a market where it already had a mainstream brand. It wanted to establish the optimum price points and relationships between its two brands to maximise its strength in the market.

Testing alternative price scenarios
A combination of modelling of consumer preference, with and without the new brand in the market, and specific price sensitivity testing, allowed us to advise the client on:

• the optimum price for launching the new brand;
• the optimum price relationship between the two client brands;
• the share likely to be achieved by the new brand;
• cannibalisation rate from the existing brand; and
• potential enhancements in positioning/communication strategy and packaging for the new brand

The pricing research approaches included Brand Price Trade-Off (BPTO), Price Sensitivity Measurement (PSM) and matched panel fixed price scenarios.

Going to market
The client revised its original launch plans to incorporate the findings from the research, and is implementing the launch in a major market in Eastern Europe