How Do you Know the Price of Your Products are too HIGH?

 

When asked what’s more important where you sell your product or the price of the product?  The answer may be more difficult than you think.  If you were to ask PepsiCo, they might just say the value of their product is at the intersection of what consumers are willing to pay for it and what is cast to get that product place on the shelf. 

 Recently Carrefour stopped selling PepsiCo products in four European countries because they raised the prices to high?  That was Carrefour saying that.  The question is, will consumers demand PepsiCo branded products and ask Carrefour to bring them back, or will they simple opt for a substitute product. 

That according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® “creates an opportunity for ‘forced trial’ in most instances and if the product is less expensive and  has the same or more appealing flavor, texture, package size customer migration might just follow.”

Recent inflation has consumers on edge, even if they received a healthy pay increase themselves, they are still aware of what they have been paying for branded products and simply dislike how much they have recently gone up in price.

Grocery stores, restaurants, and convenience stores are facing increased competition from the Dollar Store sector.  All food retailers are used to selling volume and living on slim margins. PepsiCo sells many items that consumers like to bundle (Mix & Match) in to a convenient meal solution according to Johnson.

Should a retailer the ilk of Walmart, Carrefour, Kroger, or Tesco use price of your product alone to determine if they are willing to continue selling your product? Does a Branded potato chip add value to the retailer selling potato chips? 

When a retailer is dropping a brand, on price alone they are disrespecting the consumer.  When a retailer replaces a brand with a private label ilk niche product for less, they empower consumer choice.  However, brands the ilk of PepsiCo, Kraft Heinz, and Procter & Gamble have a long-standing relationship with consumers and powerful brand messaging that can drive a consumer from one retailer to another.

Even more important legacy brands the ilk of Kraft, Colgate, Tyson, and PepsiCo have a new product innovation pipeline that private label does not.  That innovation pipeline drives trail, visits, top-line sales and bottom-line profits for all retailers need to keep customers thinking that they have contemporary relevance.  

Marketing messaging matters.  Brands do have a relationship with consumers, if success does leave clues its time that brand messaging edifies brand values.  If it does the consumer will follow your brand where ever you sell it.

Do you know how to find your Price, Value, Service Equilibrium? The team at Foodservice Solutions® thinks that, consumers are resetting the Price, Value, Service Equilibrium. The formula for this equilibrium is as follows:

 

(Mobile Access + Digital Payment + Delivery) X (Price + Food Quality + Speed) = Value Incremental Value: Constantly Changing Menu (Seasonally / Sustainability with Creditability)

 

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation, and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter