Window to a greater margin.
During the crisis, the chains have done their homework and their only plan was to survive. The consumer has seen the price of their products more frequent and is accustomed to a greater competitive and promotional pressure that makes the true price of things in time, format and channel.
Given the change in the economic cycle, the best performing operators continue to use basic mechanisms that support good pricing:
– Buy based on a detailed preliminary plan elaborated of PVPs by category of product
– Concentration on a reduced number of PVPs
– Very clear definition of input and output PVP by type of product
– Greater emphasis on PVP most repeated by category
– Objective and systematic monitoring of competitors as references without automatic mimicry
But this is not enough. The most advanced operators incorporate value management:
– Selective incorporation of intermediate PVP points with higher value products as a real window towards a larger margin
– Management of the perception of the price and not the “mere” reality
– Constant communication of added value with the price both in point of sale
– Greater emphasis on promotional actions of% discount on external brands
– Use of predictive analytics to estimate, in advance, the perception and acceptance by the customer of the product / promotion
Far from using linear markup in a semi-automatic manner to the assortment, pricing management requires not only a prior plan but also a greater contextualization by type of product, moment, format, location and channel.