Dannon Talks Pricing: The Forgotten Variable
Price management has been pushed aside by many consumer goods companies, but it can be a key strategy to drive success. In the next five years to 10 years, The Dannon Company believes pricing will become one of the most important areas of support for retailers in terms of value creation in category management.
During a CGT Web seminar on July 1, 2009, Spencer Baird, director Category Management, Wal-Mart/Sam's Club Team at Dannon; Simon Ellis, practice director, Supply Chain Strategies at Manufacturing Insights, an IDC Company; and Kirby Forlin, director of Consulting at Sequoya, discussed the business implications, the benefits and the importance of pricing strategies. Here are some highlights from the event:
--Simon Ellis kicked off the event by revealing trends in the consumer goods industry, including cost and margin pressures; globalization and outsourcing; global management and local execution; and the changing demographics of demand, to name a few. He continued to review the five "P's" of marketing: Product, Promotion, Place, People and Price. "Price has become secondary to some of these other points, but certainly in the past six to nine months - where we've seen a shift from premium to value - I think price is returning in full force as an important element to the marketing mix."
--Baird of The Dannon Company revealed three themes that he expects will become major buzzwords in the industry over the next few years: Decelerating Technologies, Human Capital Intervention and Return on Net Energy. He elaborated on each: "Technology in the future is actually going to help us slow down, react to and prioritize information and data a lot differently." He reiterated that pricing analytics represent the biggest opportunity to drive value for retailers today, but they challenge the current intellectual model. "The shift in thinking needs to focus on movement from price points to price 'guard-rails,' and internal value derived by these discussions can yield arguably the highest return on net energy," said Baird.
--Forlin was on hand to offer a consultant's perspective based on her experience at Sequoya. Forlin urged that consumer packaged goods companies explore the following five questions when it comes to pricing: What are the burning questions? What is the size of the prize? Where do CPG companies fall down? Why don't things change? What is the solution? "Spend needs to be more efficient, which is often easier said than done," she said.
Click here to listen to this web seminar event in its entirety.
During a CGT Web seminar on July 1, 2009, Spencer Baird, director Category Management, Wal-Mart/Sam's Club Team at Dannon; Simon Ellis, practice director, Supply Chain Strategies at Manufacturing Insights, an IDC Company; and Kirby Forlin, director of Consulting at Sequoya, discussed the business implications, the benefits and the importance of pricing strategies. Here are some highlights from the event:
--Simon Ellis kicked off the event by revealing trends in the consumer goods industry, including cost and margin pressures; globalization and outsourcing; global management and local execution; and the changing demographics of demand, to name a few. He continued to review the five "P's" of marketing: Product, Promotion, Place, People and Price. "Price has become secondary to some of these other points, but certainly in the past six to nine months - where we've seen a shift from premium to value - I think price is returning in full force as an important element to the marketing mix."
--Baird of The Dannon Company revealed three themes that he expects will become major buzzwords in the industry over the next few years: Decelerating Technologies, Human Capital Intervention and Return on Net Energy. He elaborated on each: "Technology in the future is actually going to help us slow down, react to and prioritize information and data a lot differently." He reiterated that pricing analytics represent the biggest opportunity to drive value for retailers today, but they challenge the current intellectual model. "The shift in thinking needs to focus on movement from price points to price 'guard-rails,' and internal value derived by these discussions can yield arguably the highest return on net energy," said Baird.
--Forlin was on hand to offer a consultant's perspective based on her experience at Sequoya. Forlin urged that consumer packaged goods companies explore the following five questions when it comes to pricing: What are the burning questions? What is the size of the prize? Where do CPG companies fall down? Why don't things change? What is the solution? "Spend needs to be more efficient, which is often easier said than done," she said.
Click here to listen to this web seminar event in its entirety.