As a reminder, in our series of KPIs on Trade Marketing we have already discussed:
Trade Marketing KPIs associated with People (1/5)
Trade Marketing KPIs associated with Products (2/5)
A study by Forrester Consulting determined that in 52% of promotions, shoppers would have bought the product anyway if it were not at a reduced price. Pricing is one of the most important and complex decisions, and that is why we want to dedicate a special chapter to the indicators related to it.
Table of Contents
Trade Marketing KPIs associated with Prices
Price per unit or per kilo
Psychological price
Price tiers
Average price
Elasticity
Tendencies
Margins
Sell-in and sell-out
Conclusion
Trade Marketing KPIs associated with Prices
The price factor will be decisive in the interest in the products, the trust and the final purchase decision. To do this, we must keep in mind some factors singapore b2b leads that affect the price and that should be included as references for a good diagnosis.
Before we dive into these Trade Marketing KPIs associated with Prices, let's think for a moment about the current situation and how it is being handled.
Can you tell which product categories are most sensitive to market price within your brand?
Do you think that the price of your POS is in line with what shoppers expect?
Could you get more profitability from some products depending on the market and customer disposition?
To what extent is a high or low price affecting your sales?
Let's look at the performance indicators that will help us draw up a roadmap towards more optimized pricing.
Price per unit or per kilo
When analyzing whether the price is appropriate in relation to other KPIs such as sales, we can evaluate it taking into account the value of the unit or based on the volume or weight. We talk about sales by value when we analyze the total units sold, the price for each unique item and the price per kilo.
Psychological price
Are we appealing to the shopper's emotion to boost conversion at the point of sale? In trade marketing we cannot ignore the KPI of psychological price, which refers to the value perceived by the shopper.
Trade Marketing KPIs related to Prices
Depending on the customer profile, a higher cost may be appreciated if it is associated with a higher quality product. On the other hand, another segment will prioritise the lowest price, even if it is far from the market average.
Price tiers
In certain cases we need to analyse the price of several products together, rather than doing it individually for each one. This can work for certain premium or mainstream products, for example.
This Trade Marketing KPI associated with Prices is strategic and we can seek the optimization of a certain tier, in order to analyze it in terms of price and other parameters.
Average price
Also known as the price range, it gives us key information about the market. Let's not forget that falling behind the competition can generate distrust in shoppers, whether it is downwards or upwards. For certain products, the range can be wider, and thus we obtain an average that can be further away from the price set by our brand.
Once we have evaluated this average, we can decide to adjust the price of a product. In this regard, it is important to keep in mind that variables must be considered in this decision, such as the shopper profile, the sales channel and seasonality.
Elasticity
Like a rubber band that stretches and adapts, does the price fit the context, the time of year, the segment and the particular POS? Data science specialists have increasingly advanced technology that allows them to detect with great precision the impact of price on sales.
Applying pricing dynamically is a common strategy in retail, which if done intelligently and analyzed, can yield excellent results.
Tendencies
This Trade Marketing KPI associated with Prices does not refer to a futuristic vision of the horizon towards which the market is heading. The indicator is very precise and parameterizable, as it should be, and focuses on analyzing the evolution of the price-sales relationship over time. Campaigns and areas can be taken into account, in order to evaluate whether there is a possible future estimate, according to the observed pattern.
