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HRCP Case Study: The price is right

Situation

For nearly 10 years, a major consumer category leader had kept the lid on pricing for its brands due to competitive and customer concerns. With its own costs on the rise, the company had found itself under mounting profit pressure. Recognizing the need for a broad pricing of its brand portfolio, the company needed help getting the price/value relationship between sizes/brands and channels in proper alignment.

HRCP Role

Henry Rak Consulting Partners was brought on to develop an optimized pricing strategy for the client’s major brands to help regain margin, while mitigating negative volume impacts.

HRCP Advantage

Based on a Pricing Strategy analysis, Henry Rak Consulting Partners:

Developed a comprehensive pricing plan consistent with market structure and reflecting the relative consumer price/value of each brand, based on brand roles.
Quantified advertising/trade promotion spend back to support volumes at new pricing.
Performed extensive modeling of alternate price/promotion scenarios to identify and demonstrate optimal levels.
Restored the price value relationship by recommending appropriate changes to list price, promotional price points and level of activity, and ad spending.
Developed a customer rationale and sell-in strategy to achieve retailer buy-in.

Results

Retailers bought into the pricing action rationale and increased SRPs and promoted price points to recommended levels.
Established clear pricing strategy for basic to premium offerings, various classes of trade, and multiple pack sizes.
Revised pricing strategy successfully set the stage for future price increases.

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Competitive Frame:

Identifying the sources of growth

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