Today’s marketplace is extremely tight for consumer packaged goods (CPG) companies. To stay in the game, CPG companies need to be constantly innovating; to do that, they need an accurate and current data source.
There is immense value for brands in collecting ongoing data surrounding the prices of their products and other commodities in stores. It can provide insight into potential pricing barriers for customers, provide early warnings if changes need to be made to prices, and help monitor retailer compliance with any pricing agreements.
For most buyers, the price of a product is very important. According to The Wall Street Journal, “Price is still top of mind for shoppers, with 77% of 1,035 consumers surveyed by the Food Marketing Institute trade group saying they picked their primary supermarket based on low costs.”
Not only can the price of a product impact a consumer’s decision to buy, it can also change how a product is viewed. Having too low of a price can be damaging for a brand, often indicating to a consumer that the product isn’t of high quality or it is cheaply made.
Generally speaking, by having ongoing data, you can better understand if retailers are following any agreed upon pricing such as the manufacturer’s suggested retail price (MSRP) or minimum advertised price (MAP). This data can be extremely valuable for manufacturers when negotiating deals.
In practically every market, upstart brands and private-labels are giving traditional CPG companies a run for their money. Understanding how other companies are pricing their products and any ongoing promotions can help you understand how to compete with rivals and better position your in-store products.
Monitoring retail prices for manufacturing can also provide insight into the strategies that a retail outlet is utilizing. It is important for manufacturers to understand what is driving retailer decisions.