The Importance of Tracking Competitive Price
Price Increases Can Mean Significant Revenue

New York, NY: Today, National Promotion Reports, LLC, a market research company specializing in the reporting of competitive cost and promotion allowances for manufacturers, introduces new reports and significantly increased data accuracy through the introduction of Price-Trak 3.0.

Importance of Price

Although pricing discussions may not be the most glamorous part of a marketer’s job, pricing is just as important as advertising and marketing activities. The pricing of a product is a key element in determining the profitability of your business. In other words, if your price is too high how can you competitively compete in your market segment? Conversely if your price is too low, you could be losing revenue toward the bottom line.

The average consumer is very price sensitive and this sensitivity will influence what they purchase. In a market where a customer’s purchase will be influenced by price, the less price sensitive your customers are, the greater control you have over your pricing. The more price sensitive customers are, the more you need to monitor your competition and the market to ensure you remain competitive in the market. Which are you?

Factors Effecting Price Strategy

Marketing decisions are guided by the overall objectives of the company. There are four main marketing objectives that feed into pricing strategies:

• Return on Investment (ROI)
• Cash Flow
• Market Share
• Maximize Profits

Three of the four are profit based and are critical elements in overall brand and company success. Market share can be calculated on a unit or dollar sales basis with seasonal or promotional fluctuations throughout the year. External factors that may affect pricing strategies are based primarily on competitive brands and how your pricing may or may not reflect your competitive point of difference such as premium ingredients or perhaps perceived value in the eyes of the consumers.

Why Price-Trak 3.0 May be Right for Your Brand

First, Price-Trak DOES NOT track retail shelf pricing! Price-Trak provides competitive manufacturer list cost or the pricing that retailers/wholesalers purchase the item for. This means that you will always have competitive manufacturer list cost by S.K.U at your fingertips and be able to see competitive price changes. Additionally, Price-Trak reports competitive trade deals and timing of those promotions in easy to use calendars.

To further quantify the value of Price-Trak 3.0, lets take a look at a basic example of lost revenue by not having appropriate insights on competitive price changes, and once this revenue opportunity is missed, it will be lost forever!

Let’s say you are managing a brand with $100mm in sales. Your case cost is $20.60 based on 24 case pack. That means your unit cost to the trade is $.86; and you sell 4.8mm cases or 116mm units annually. On a weekly basis, this equates to 2.2mm units or $1.9mm in factory $ sales.

Total Factory Sales	$100,000,000
Case Cost 24 Pack	$20.60
Unit Cost	$0.86
# Cases Sold per Year	4,854,369
# Units Sold Per Year	116,504,854
# Units Sold per Week	2,240,478
Factory $ Sales Per Week	$1,923,077

Now for the fun stuff. You are the #2 brand in a category where the market leader takes a price increase of $.04 per unit. Your price strategy is to maintain a price advantage of $.10 at retail. The $.10 advantage may be based on internal pricing studies, an/or in conjunction with other marketing objectives such as ROI or to maximize profits. Hence, your list cost should reflect a $.10 per unit difference as compared to the market leader’s list cost. The price increase will allow you to take a price action of $.04 per unit or $.96 per case. So, what does that mean in terms of revenue?

Each week that is missed equates to factory $ sales of $89,619! If we assume a profit margin of 20 percent, than profit lost per week amounts to nearly $18,000.

Per year incremental revenue	$4,660,194
Per week incremental revenue	$89,619

Price-Trak starts at $4,500 per category.
You receive Weekly Alerts on competitive Price Actions.
Contact us today to get started.

It All Starts with Pricing, that's why you need PRICE-TRAK.

About National Promotion Reports, LLC:

National Promotion Reports provides specialized reports for both the retail and foodservice sectors. Their reports identify pricing and promotional allowance insights. The Price-Trak Report monitors 150 standard warehouse categories provided by consumer packaged goods manufacturers. Price-Trak provides easy to use syndicated reports to monitor price changes and competitive trade allowances throughout the country. National Promotion Reports also supports grocery wholesalers to assist with pricing and promotional allowance understanding to help ensure grocery wholesalers remain a viable channel within the consumer packaged goods industry. For more information on this study or other inquiries, please contact bob@natpromo.com or 888-435-3551.

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