Case Study- Pricing & Pack Price Architecture

An already commoditized category had recently become the centre of attention for loss leading discounts in a large retailer in the UK. The retailer had chosen to increase discount further from 50% to 85% in a category that was already at 95% Volume Sold on Deal, this was causing significant category devaluation, reducing repeat purchase in replenishment and crucially impacting retailer margins and generating significant JBP pressure. 

Recognising the reason for the commoditisation of the pricing as well as looking at the category in totality it was clear some fundamental pack changes needed to be made to improve the value offering, drive more trial and improve replenishment rates on non promoted lines. Working with supply chain a replenishment item was removed from the promoted pack, bringing the pack price down overall, enabling us to get to a round and lower price point that the retailer was looking for, whilst reducing the discount level and overall margin impact on the retailer. 

It was critical at this point to also ensure the replenishment sales happened and large pack replenishment SKU's were co sited with the heavily discounted trial products during the promotional period and afterwards to ensure trial was converted to consumption. 

The OTC market is a complex GTM model, more so than traditional FMCG as you have additional points of influence along the shopper path to purchase, notably the Doctor and the Pharmacist and a more fragmented channel RTM as pharmacies are often independently owned. All of this means that trade & marketing investment needs to be considered more carefully as there are more levers to pull. 

Seeing this complexity and underperformance I developed a new GROWTH LEVER approach that is uniquely data based and accountability driven..Joining together path to purchase data as well as marketing funnels and shopper insights we were able to prioritise investment approaches per brand and per channel across all spend types (marketing, GTN and shopper) to drive accountable decision making and a more targeted approach to trade investment within brands.