How does your brand perform at different price gaps with key competitors?  What are the critical pricing points relative to the market? If your brand’s price changes, what effect does that have on sales volume? And what interactions are evident with competitors?  What is your brand price elasticity and how does it compare with the competition?

Optimum Pricing Point When Price Gap < 50 cents

A 1% Drop in Price Increases Base Sales of Brand A by 3.5%                

Case Study

The client’s market share was highest in stores where the price premium versus competitor B was less than 50 cents. Once the 50 cents differential was exceeded the client’s share declined significantly and was overtaken by competitor B.  The client’s brand price elasticity was computed to be 3.5, indicating that on average a one percent price cut yielded a 3.5% increase in base sales. The brand was moderately price elastic relative to the key competitors in the category.