Evaluate if your brand's prices are eroding faster than the market and identify which segments are driving this erosion in 5 easy steps.
As the market evolves and competitors introduce new products, maintaining your product's sales momentum often involves adjusting its price. However, this strategy can lead to a continuous cycle where your prices—and possibly your margins—are reduced, sometimes without a corresponding increase in sales volume.
How Price Monitor Can Help
Price Monitor enables you to spot opportunities to maintain or even increase revenue by identifying products that do not significantly change in sales volume despite price alterations (also known as price inelastic products). These are the products that could benefit from less frequent promotions, thereby mitigating their price erosion.
Step-by-step
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Step 1 – Access Price Monitor Navigate to ‘Pricing & Promotions’ on the gfknewron platform and select ‘Price Monitor’. |
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Step 2 – Select Competitors Select your key competitors from the top navigation bar. This will set the context for your analysis. |
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Step 3 – Define the Time Frame Specify the time periods for comparison in the top navigation. Set the months you would like to review as a focus period and a comparison period. It is also possible to do so for a single month. In this example, December 2023 is your focus period and January 2023 as your comparison period. These settings will allow you to analyze the extent of price erosion dynamics affecting your brand over the course of 2023. |
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Step 4 – Benchmark Your Brand’s Pricing Use the ‘Market Overview’ table to compare your brand’s price erosion against the market and your key competitors. This will help you to assess the performance of your brand’s price stability over time relative to your biggest competition. If your brand’s prices dropped faster than the market average, this insight can guide your future pricing strategy. In this example Brand B’s price eroded slightly faster than the market average. Brand B’s price erosion was also more than 2% above its strategic competitor. |
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Step 5 – Detailed Segment Analysis By comparing your brand with others in the same segment, you can identify where your pricing strategy may be faltering and adjust accordingly. In this example, diving deeper into the feature segments reveals that the price erosion of Brand B is driven by one of the premium segments. Brand A and Brand B represent more than 2/3 of the segment’s revenue. A comparison of the two brands reveals that Brand B’s price erosion was more than 3% higher than Brand A over the course of 2023. |
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Next steps
Expand your analysis by exploring the ‘Products’ section and filter for the identified segment. Be on the lookout for your SKUs that show low responsiveness to price changes (price elasticities between -1 and 0). Considering fewer promotions for these SKUs could help slow down price erosion.
Ready to begin evaluating your brand’s price competitiveness?
Log in and give it a try on gfknewron.
