Managing Pricing & Winning Brands During Recession
This week we continue to look at managing price plus how winning brands won during the last recession plus the latest on FMCG around the world:
Consumers have a ‘reference price’ in every category, based on current and past experience. For example, experiencing a lot of promotions reduces the reference price. Around this reference price:
A) Consumers have a ‘comfort zone’ within which prices are ‘acceptable’
B) Those with higher reference prices have wider ‘comfort zones’
C) Greater shopping frequency narrows the ‘comfort zones’
D) Those with higher brand loyalty have wider ‘comfort zones’
A few weeks ago we showed that brands that gained share over the last recession introduced 60% more new products over the period than losing brands. In addition, winning brands increased distribution and their range and ‘managed’ their prices – all pointers for this and next year
The FMCG market continues to benefit from the current crisis in Europe and USA although as restrictions are relaxed we are likely to see some drop back from the recent levels. Underlying shopping behaviour still shows lower shopping frequency and larger basket sizes
