Project case:
Price optimization for a consumer product
Objective
After a successful product development, the manufacturer of an innovative cosmetics line faces two challenges: first, the general product positioning in the competitive landscape and second, determining the optimal product price level (to meet volume as well as profit targets).
Approach by EbelHofer Consultants
Initially, market analyses and internal discussions are conducted with management, sales and commercial partners. The findings indicate two shortcomings, relating to the perceived value of the innovation and the willingness-to-pay of end customers. An end customer survey using innovative methods to quantity customer preferences (MouseLab, Conjoint Measurement Analysis) provides clarity and reveals reliable preference structures, willingness to pay and price elasticities. On this basis, a clear identification of the target group (benefit segmentation) is achieved and the corresponding optimal price level is determined (value pricing).
Result
The client gets a clear idea of the size of the target group and its requirements. In addition, valuable input is provided - for developing the communication strategy as part of the market launch and for sharp positioning in the competitive environment. Also profit-optimized, differentiated price levels are derived for individual product lines of the new cosmetics ensuring that the targeted sales volumes are achieved.
