In an exclusive interview with LSA during the Commercial Strategies Congress on October 1st in Paris, Catherine Collart-Geiger, former CEO of Picard and now an Advisory Board Member at PricingOne, shared her expertise on the challenges of pricing in today’s volatile market.
Today, price has become the primary decision factor for consumers when choosing a store or product. But what lies behind this number? Understanding what consumers are truly willing to pay and how they perceive the “fairness” of a price is a significant challenge for companies, especially in times of inflation. As prices rise and consumers expect decreases during deflationary periods, knowing how far to go up or down is essential to maintain both profitability and customer satisfaction.
The Current Pricing Challenges: The Dilemma of Price Perception and Acceptability
Periods of rising prices have forced many companies to adjust their rates to preserve their margins. However, how far are consumers actually willing to go? And to what extent can price reductions meet their expectations during deflation without eroding profitability? Setting a price is, above all, about understanding its role in attracting customers and its structuring role in category management. A poorly calibrated price can lead to a loss of profitability or, conversely, create distrust if consumers see the product as “too cheap” to be of quality.
PricingOne’s Approach: Analyzing the Price Ecosystem to Better Understand Consumers
To address these challenges, PricingOne offers a systematic, customer-oriented approach to pricing. Their methodology begins with an in-depth analysis of consumer expectations, considering the diverse values and purchase criteria they hold. Each consumer places varying levels of importance on products and has specific expectations: low prices, environmental sustainability, suitable packaging, and more. For instance, the same consumer might seek smaller formats for weekly individual consumption and family-sized formats for weekend gatherings.
This approach goes beyond mere pricing to grasp consumers’ perception of a product’s “value.” What makes a consumer willing to pay a particular amount for a product? Understanding this notion is crucial to determine the right price that satisfies both the customer and the company’s profitability needs.
Structuring Category Management and Directing Communication with PricingOne
Once consumer perceptions and expectations are clarified, PricingOne’s approach enables structuring category management. This means identifying the most relevant formats, popular flavors, and even product attributes that make a genuine difference. For example, in the seafood sector, while distributors often highlight sustainable fishing, studies show that consumers consider this an expected standard. Consumers actually place higher importance on the product’s origin and its Nutri-Score. Adjusting communication to these key factors reinforces the perceived value of the product.
Aligning Teams with a Cohesive Execution Strategy
Finally, the PricingOne methodology includes an action plan that allows both distributors and manufacturers to coordinate around a coherent pricing and category management strategy. By creating strong internal alignment, each team can contribute to effectively implementing the strategy, adding value in an increasingly complex market environment.
In conclusion, pricing is not just about numbers: it reflects a complex strategy that encompasses consumer expectations, profitability needs, and communication goals. With PricingOne, companies have a powerful tool to analyze, structure, and execute an adapted pricing strategy, meeting the demands of an ever-evolving market and creating real value for the consumer.