Client Background
A well-established FMCG brand operating across
multiple personal care and household categories in India. The client had strong
distribution in urban markets and growing traction in Tier 2 cities. Despite
premium packaging and product quality, pricing inconsistencies across SKUs were
undermining both profitability and customer loyalty.
Challenges
They Faced
Despite high brand recall, the client faced
following challenges:
· Chronic discounting pressure, especially
during monthly and festival sales cycles
· Eroding contribution margins, with up to 18%
margin dip in their top-selling SKU over 12 months
· Price confusion across retail and e-commerce
channels, leading to customer churn
· Premium SKUs were often clubbed with
mass-market items, diluting perceived value
· The internal pricing strategy lacked a
clear framework, and most decisions were reactive to competitor moves.
Our Approach
TraceData Research adopted a multi-layered pricing optimization strategy that balanced revenue goals with consumer
psychology:
1. Elasticity
Mapping Across Portfolio: Analyzed
two years of SKU-level sales and promo data across 50+ products. Identified 16
SKUs where price changes had negligible impact on volume, giving room for
profitable repositioning.
2. Value-Based
Repricing: Moved away from cost-plus pricing. We
assessed customer willingness to pay by segment, occasion, and brand
perception, repositioning 12 SKUs to reflect actual value delivered rather
than competitive undercutting.
3. Price
Laddering Architecture: Designed a
clear good–better–best pricing structure. This aligned price points with
product benefits, improving consumer navigation and upsell opportunities,
especially in high-margin premium segments.
4. Promotion
Guardrails & Channel Controls:
Standardized base pricing across 3 major modern trade partners and 4 e-commerce
platforms. Introduced thresholds for promotions to curb excessive discounting
while preserving retailer support.
5. Rapid
Testing & Feedback Loops:
Piloted new price bands in two metro cities and tracked weekly sell-through.
Iterative adjustments improved promo ROI by 18% and reduced margin dilution
from short-term offers.
This was a shift from reactive discounting to
proactive price management, anchored in data, brand equity, and behavioural
economics.
Outcome
The implementation of TraceData Research’s pricing strategy delivered
tangible results both financially and perceptually. By rebalancing price points
with customer value and market dynamics, the brand was able to protect margins
without compromising growth or retention. The key outcomes were:
· By eliminating unnecessary discounting and
repositioning value-rich SKUs, the brand saw a 7% increase in per-unit earnings
over a 3-month period.
· Products in the “better” and “best” tiers
contributed significantly more to profitability, while low-margin SKUs were
either repositioned or deprioritized.
· Frequency and depth of promotions dropped by
35%, particularly across modern trade channels.
· Post-implementation surveys revealed a 22%
increase in consumers associating the brand with “premium” and “value for
money”.
· High-value customers, especially in urban and
e-commerce channels, showed a 12% increase in repeat purchase rate within the
premium SKU band.
Client
Testimonial
"Working with TraceData Research was a
turning point for us. We had been stuck in a cycle of promotions, always
chasing volume at the cost of margins. Their pricing expertise helped us see
our portfolio through the lens of customer value rather than just cost. The
outcome speaks for itself: better revenue, healthier margins, and a stronger
brand position."
-
Head of
Strategy, Leading FMCG Brand
Contact
Us: -
TraceData
Research
+91
9266849840
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