Worksheet · B2C via trade: Brand Pricing Health Check
Test the shelf price on your five biggest products
A shelf price built up from cost plus the retailer's margin has never met a shopper. This sheet sets a target shelf price from the shelf, then tests it on five products to find where sales tip. It builds the Competent step of the check:
Target shelf prices by pack and channel are set from competitor gaps and category price points, and the retailer's margin is worked back from there.
Step 1. The price points that matter
Read the shelf in each channel. Price points are the round numbers shoppers anchor on.
| Product and pack | Channel | Our shelf price now | Nearest competitor | Own-brand | Category price points | Target shelf price |
|---|---|---|---|---|---|---|
| e.g. Muesli bar, 6 pack | Grocery | $4.20 | $4.00 | $2.80 | $4, $4.50, $5 | $4.50 |
Work the retailer's margin and your list price back from the target. The shelf-back sheet (rrp-basis) has the sum.
Step 2. Plan one test per product
Six weeks, one banner, one state. Compare with a control the retailer does not change.
| Product | Banner | State | Test shelf price | Control (other state, or other banner) | Start | End | Owner |
|---|---|---|---|---|---|---|---|
| e.g. Muesli bar, 6 pack | Banner A | State 1 | $4.50 | Banner A, State 2 | Week 1 | Week 6 | Category manager |
The retailer sets its own shelf price. A test runs only with the buyer's agreement. Never ask a retailer to hold a price at or above a level. Ask a lawyer where the arrangement is unclear.
Step 3. Read the result
Before you read it:
- Weeks with stock-outs are taken out.
- Competitor promotions in the test weeks are noted.
- The same weeks last year are compared.
- The control store set moved in step with the market.
| Product | Units per store per week before | Units per store per week during | Change against control (%) | Price where units fell sharply (tipping point) | Keep, move or retest |
|---|---|---|---|---|---|
A product that tips within a week or two is price sensitive. Test it again before the next list-price review.
Done when: each top pack has a target shelf price by channel, set from competitor gaps and category price points. The retailer's margin is worked back from it, and five tests have a recorded tipping point.
Adapted from our own trade-spend review (Deloitte, 2015).
From the B2C via trade: Brand Pricing Health Check. Your report links the sheet for each of its moves.