Common Obstacles in Consumer Packaged Goods Pricing

The consumer goods industry is home to countless brands, product lines and customer segments. It can be difficult for companies of any size to apply the best pricing and remain consistent. Challenges businesses often struggle with include:

• Pricing new products: Innovation is vital in creating and sustaining growth. With so many products on the market that contain similar ingredients and have comparable benefits, it can be hard to know where to price your new items.
• Scaling product costs: Market launch represents a chance to charge a different price. If you want to generate more revenue per sale or move more inventory, a market launch is a great time to scale your product’s cost.
• Communicating product value: The more you can help customers understand the value your products offer, the more likely they are to buy and pay a higher purchase cost. This strategy also gives you the opportunity to differentiate your project from the rest.
• Implementing price increases: Companies must occasionally raise prices for multiple reasons. It’s essential to introduce those rising costs correctly to avoid damaging relationships with existing customers.
• Managing multiple markets: In many situations, charging varying prices for the same goods across different markets can yield greater returns. Still, this practice can become confusing quickly and requires a logical strategy.
• Running successful promotions: Discounts and promotions can help you dominate your current markets and penetrate new ones. These methods require balancing several factors like time windows and profit margins to maximize your success.
• Developing the best strategy: Knowing the right consumer goods pricing strategies, how to combine them and when they’ll be most effective represents some of the biggest challenges. Fortunately, your company can take advantage of consumer goods consulting and other retail consulting services.

When setting prices for any product, you need to choose a strategy that will boost growth, align with your customer base, match your brand message and increase market share. You must meet all these objectives to avoid missed opportunities, inventory stagnation and revenue losses.

You can use many different pricing strategies with commercial goods. The most successful method for your company and product will depend on a range of factors, including product exposure, break-even points, customer demographics and market saturation. Some of the most common techniques include:

• Price skimming.
• Dynamic pricing.
• Penetration pricing.
• Value-based pricing.
• Subscription pricing.

Expert Consumer Goods Consulting Services

Consumer goods pricing is a science. At Revenue Management Labs, we know the formula to help you create a price point that resonates with your customers and improves your bottom line. Our firm specializes in developing customized revenue-growth strategies. You can depend on us to provide you with expert retail consulting services with the same dedication and commitment as a fellow partner.
 

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